Determinants Affecting Internal Audit Effectiveness

ABSTRACT

This study tries to identify the determinants that affect the effectiveness of internal auditing for listed firms in India. A sample of 300 listed companies was drawn. Questionnaires were mailed to the head of audit department, internal audit managers, internal auditor and head of accounts of each company. The overall response rate was 28.3%. The results were derived by applying multiple regression method and the three determinants turned out to be significant. The three determinants are risk-based planning, usage of Big Data and Analytics, and frequency of meetings of internal auditor (IA) with audit committee (AC) respectively. The model explains 42.8% of variations in the dependent variable (IA effectiveness). The study indeed encourages internal auditors to develop their core skills and competencies in the area of risk assessment and Big Data and Analytics for delivering better services to the auditees, the board of directors and the AC members. The implications of these findings may be of importance to internal audit professionals, accounting professional bodies and the regulators. Direction for future research is also provided.