Ranking the damage of internal audit processes in the environment of specific internal controls of industrial organizations

Document Type : Original Article

Authors

1 Ph.D. Student in Accounting, Faculty of Humanities, Islamic Azad University, Firoozkooh, Iran.

2 Assistant Professor, Department of Accounting, Firoozkooh Branch, Faculty of Humanities, Islamic Azad University, Firoozkooh, Iran

Abstract

Abstract

The purpose of this research is to rank the damages of the internal audit process in the environment of specific internal controls of industrial organizations. The method of the current research is a combination of sequential exploratory type. In the qualitative section, the obtained data were coded through the Grounded Theory method during 14 interviews and through the MAXQDA software, and then in the quantitative section, 100 questionnaires were prepared and sent based on the obtained indicators, and 85 questionnaires were received. In the quantitative stage, the reliability of the data was confirmed through Gronbach's alpha test. Also, structural equation modeling (SMARTPLS software) was used to determine the relationships between categories and to create consensus and ensure the indicators extracted from Delphi analysis. Then, using the Friedman test, the identified factors were ranked. The statistical population was financial managers, internal and independent auditors (experts) of industrial organizations, and the findings of the research showed that factors 1. Lack of sufficient independence 2. Not having a favorable organizational position 3. Lack of management support and attention 4. Lack of proper professional qualification have a higher priority as damage

Keywords

Main Subjects


Abdul Wahab, E. A; Gist, W. E; Gul, F. A; & Mat Zain, M. (2021). Internal Auditing Outsourcing, Nonaudit Services, and Audit Fees. Auditing: A Journal of Practice & Theory, 40(2), 23-48.
Abiodun, E. A. (2020). Internal Control Procedures and Firm's Performance. International Journal of Scientific & Technology Research, 9(2), 6407-6415.
AL-Mashhadi, A. S. J. (2021). Review on Development of the Internal Control System. technology, 31, 35.
Asadzadeh, Hamid; Nikbakht, Mohammadreza. (1400). A conceptual model for determining the effective size of the internal audit unit. Knowledge of accounting and management audit, currently being published. [In Persian]
Ariyapanah, Mohammad (1401), the effect of gender diversity in the audit committee and the efficiency of internal controls on the quality of financial reporting and commercial credibility, strategic research on budget and finance, volume 4, number 1. [In Persian] 
https:// Dor.org/20.1001.1.27171809.1402.4.1.1.2
Bamari, Shorvarzi, Noori Topkanlo. (1402). Examining and explaining the benefit between internal audit and management, adapted from the research of McNeils (2008), Journal of Management Accounting 61 / Number 75 / Summer .6041 [In Persian]
https:// Doi.org/10.30495/jma.2023.22624
Boskou, G., Kirkos, E., & Spathis, C. (2017). Internal Audit Disclosure Regarding to External Audit in Greece. In Advances in Applied Economic Research (pp. 691-703). Springer, Cham.
Chang, S. I., Chang, L. M., & Liao, J. C. (2020). Risk factors of enterprise internal control under the internet of things governance: A qualitative research approach. Information & Management, 57(6), 103335.
Christensen, L. (2022). Internal audit: A case study of impact and quality of an internal control audit. International Journal of Auditing.
Developing adaptive teams: A theory of compilation and performance across levels and time. Pulakos (Eds.) , the changing nature of work performance: Implications for staffing, personnel actions, and development, 240, 292.
Fallah, Fatemeh, (1401), The relationship between internal control weakness and audit fees: emphasizing the role of managers' self-interest and political communication, 7th International Conference on New Perspectives in Management, Accounting and Entrepreneurship. [In Persian]
Fatah, N. A., Hamad, H. A., & Qader, K. S. (2021). The Role of Internal Audit on Financial Performance Under IIA Standards: A Survey Study of Selected Iraqi Banks. Qalaai Zanist Journal, 6(2), 1028-1048.
Halim ، . (2023). Effects of organizational climate, role clarity, turnover intention, and workplace burnout on audit quality and performance Journal of Accounting & Organizational Change, 123(2), 347-363.
Imen Khelil. (2023). The working relationship between internal and external auditors and the moral courage of internal auditors: Tunisian evidence. Persian Gulf Journal of Scientific Research, 1.
Jafari, Mona, (1401), the effect of internal audit performance and competence on the operational efficiency of the company, the third international conference on new challenges and solutions in industrial engineering, management and accounting. [In Persian]
Jurakulovna, J. G., & Bahodirovich, R. U. (2021). Improving the Theoretical Framework of Internal Audit in the Corporate.
Kozlowski, S. W; Gully, S. M; Nason, E. R; & Smith, E. M. (1999).
Ma’Ayan, Y; & Carmeli, A. (2016). Internal audits as a source of ethical behavior, efficiency, and effectiveness in work units. Journal of Business Ethics, 137(2), 347-363.
Mohamed Hegazy،Mohamed Samy El-Deeb, Hosny Ibrahim Hamdy and Yasser Tawfik
Yusuf, M., & Kanji, L. (2020). Effect of internal audit and accounting information system on the effectiveness of internal control. ATESTASI: Jurnal Ilmiah Akuntansi, 3(2), 120-125
Nasserpour, Fatemeh, (2019), Investigating the impact of internal audit characteristics on the effectiveness of internal control in companies listed on the stock exchange, Quarterly Journal of Modern Applied Studies in Management, Economics and Accounting, Volume: 3, Number 2. [In Persian]
Nikbakht, Mohammad Reza, (2017), Quality of Internal Audit in Iran: Challenges and Obstacles, Management Accounting and Auditing Knowledge, Year 7, Number 27. [In Persian]
Nisak, D. K., Imoniana, J. O., Slomski, V., Reginato, L., & Slomski, V. G. (2023). How do Internal Control Environments Connect to Sustainable Development to Curb Fraud in Brazil?. Sustainability, 14(9), 5593.
Raghanandan, K; Read, m; hoog, D. (1994). “Audit committee composition, gray directors and interaction with internal auditing.” Accounting Horizons 15,105-118.
Schneider, Arnold. (2009). “Internal Audit Issues Facing Corporate.
Shahbazi, Ali, Menti, Vahid. (1402). The relationship between audit committee oversight of internal audit performance and the nature of internal audit activities. Professional audit research. 11. 133-162. [In Persian]
 https:// Doi.org/1022034/jpar.2023.2002506.1165
Sharmsar, Amir, (1401), the relationship between the audit committee's financial expertise and internal control weaknesses and auditor dismissal with evidence from Iran's stock market, the third national conference on business management, entrepreneurship and accounting in Iran. [In Persian]
Turetken,O;Jethefer,S;& Ozkan, B. (2020). Internal audit effectiveness: operationalization and influencing factors. Managerial Auditing Journal.