Do The Board And Audit Committee Characteristics Affect Internal Audit Performance?
DOI:
https://doi.org/10.64252/nkcmxv51Keywords:
Board characteristics, Audit committee characteristics, Internal audit performance, Internal audit employees.Abstract
Purpose : Internal audit employees play a broad and important role in monitoring and assisting in enterprise risk management, so their participation is considered a key pillar in improving corporate governance (CG). This study aimed to identify the impact of board and audit committee (AC) characteristics on internal audit performance (IAP) by enhancing the participation of (IA) employees.
Design/methodology/approach: The study employs a panel data regression model to examine the impact of board and AC characteristics on IAP. Data were obtained from the Securities Depository Center and annual reports for the period 2018-2022 among 12 commercial banks in Jordan.
Findings: The study found that IAP is influenced by the board and AC characteristics. Various characteristics, including board size, board meeting frequency, AC independence, AC size, and AC experience, affect the IAP by enhancing the participation of IA employees. The study did not find an effect of board independence and AC meeting frequency on IAP.
Practical implications:The results of this study can play a valuable role in enhancing the contribution of the board and its committees in activating the role of IA and improving its performance by enhancing the participation of IA employees. This study contributes to identifying the factors affecting IAP, it will therefore have an important added value for policymakers who may use the results of this work in developing policies that ensure that the board and the AC activate the role of participation of IA employees.
Originality/value:While much of the literature examines the consequences of CG, this study considers the participation of IA employees as an essential element in enhancing IAP as a form of CG mechanism. Thus, this study contributes to the literature by providing new understandings regarding IA employees' engagement as an element of CG and its relationship with IAP. Moreover, it provides additional evidence of the influence of the board and its committees in enhancing IAP by activating auditors’ participation in the company’s decisions.
