Which factors affect the internal audit effectiveness in India?
Keywords:
Audit committee, big data and analytics, internal audit effectiveness, internal audit independence, management supportAbstract
Purpose: In the age of rapid technological changes, the nature of work of internal auditors is also changing and new influencing factors are emerging which affect the internal audit effectiveness. Therefore, the aim of this study is to investigate important factors influencing the effectiveness of internal audit in Nifty-500 listed companies in India. Methodology: The methodology used in this study was proportionate stratified sampling technique and data were collected using questionnaire method which was sent to 252 companies and 74 responses were received; however, only 64 usable questionnaires are included in the analysis. The response rate is 28.2%, non-response bias and common method bias (CMB) are none existence in the data. Factor analysis and multiple regression techniques are used. Findings: Reveal that “internal audit function and audit committee frequent meetings” and “usage of Big Data and Analytics (BDA)” are positively significant with IA effectiveness in Indian context. The regression function is highly significant and 34.2% of variations in dependent variable are explained by variations in independent variables. Implications: The implications are that sound awareness by the head of internal audit functions and top management are important on how the usage of BDA is going to influence the IA performance and frequent meetings and interactions
between IA function and AC are necessary in the changing business and technological environment in reshaping the internal audit function. Also, furthermore, how to maximize the support of employees and top management as well as to provide more independence to internal audit should be considered. Originality: The study suggests that additional evidence is warranted to support the increasing relevance and importance of BDA by internal auditors for achieving IA effectiveness.
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