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Title: Revisiting the linkage between internal audit function characteristics and internal control quality
Authors: Michailidis, Iakovos
Alexandridou, Kyriaki
Nerantzidis, Michail
Drogalas, George
Type: Article
Subjects: FRASCATI::Social sciences::Economics and Business
Keywords: Internal Control Quality Estimation
Random Polynomial Regression
Internal Audit Function, Greek Listed Companies
Issue Date: Mar-2022
Source: The Journal of Operational Risk
Volume: 17
Issue: 1
First Page: 1
Last Page: 32
Abstract: This paper revisits the linkage between internal audit function (IAF) characteristics and internal control quality (ICQ). Using the responses of 48 chief auditing executives from Greek listed companies, we consider a random polynomial-kernel metabolized regression model, which implements in MATLAB, an extended version of the approach presented in a 2018 study by Oussii and Taktak. Our results demonstrate that the proposed random polynomial model is valid, reliable and appropriate for assessing ICQ, presenting estimation performance over three times better than that of the linear regression case. Our findings suggest that the proposed model can serve as a starting point for companies and practitioners to improve ICQ levels through the assessment of certain independent variables. On that basis, our study offers insights to regulatory bodies, auditors and scholars in perceiving the contribution of the IAF’s constituents to ICQ. Finally, our approach is expected to inspire conclusive follow-on research on the assessment of ICQ in other countries with similar settings.
ISSN: 1744-6740
Other Identifiers: 10.21314/JOP.2021.015
Appears in Collections:Department of Business Administration

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