The Nature of a Dynamic Relationship between Audit Committee and Auditors, Both Internal and External

Al-Baidhani, Ahmed Mohsen

doi:10.2139/ssrn.2299027

Cited by 4 publications

(8 citation statements)

References 12 publications

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“…This committee is responsible for overseeing the financial reporting process and the internal control system (BCBS, 1998;Ojo, 2009). Evaluation of the internal control structure and process is considered one of the most, if not the most, important oversight responsibilities of the audit committee (Al-Baidhani, 2016). Based on the literature, the audit committee's expertise and the frequency of meetings are the main attributes determining the effectiveness of internal controls.…”

Section: Monitoringmentioning

confidence: 99%

The effects of the internal control system on the risk, profitability, and compliance of the U.S. banking sector: A quantitative approach

Koutoupis

Malisiovas

2021

Int. J Fin Econ

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This is strong quantitative research investigating whether and how the components of the internal control system affect the credit risk, profitability, and compliance of the U.S. banking sector. Based on the COSO Framework, Basel Committee Frameworks, and the literature, the components of the internal controls are quantified. This quantitative nature distinguishes this study from others in this field since most of the studies up to now have investigated these topics by theoretical approaches. Eleven independent variables are analysed in three different regression models, with credit risk, profitability, and compliance being the dependent variables in each model. After cleaning the data from outliers, several tests are performed, while a panel set of data is used comprising the 210 biggest U.S. bank holding companies. Fixed-effects regression is applied in the three models, while the years under examination are the five fiscal years 2013-2017. Most of the data are taken from the proxy statements (DEF 14A) and the 10-K statements because of their qualitative nature.The key results indicate that Risk Assessment, Control Activities, and Information and Communication components strongly affect credit risk. The first (Control Environment) and last (Monitoring) components have a significant effect on credit risk, though only from the perspective of the board's number and the expertise of the audit committee, respectively. In the same line, internal controls significantly affect the profitability and compliance of U.S. banks, except for the Risk Assessment component in the first case and the Control Environment component in the second case, respectively. Control Activities component and the Information and Communication component have a significant and positive relationship with the banks' profitability, while these two components are significantly and negatively correlated with the banks' compliance.

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Section: Monitoringmentioning

confidence: 99%

The effects of the internal control system on the risk, profitability, and compliance of the U.S. banking sector: A quantitative approach

Koutoupis

Malisiovas

2021

Int. J Fin Econ

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“…The audit committee receives reports about the internal control"s effectiveness and efficiency from the organization"s management, internal and external auditors (Report of the National Commission on Fraudulent Financial Reporting, 1987). Evaluation of the internal control structure and process is considered one of the most, for many people the most, important oversight responsibility of faced by the audit committee (Al-Baidhani, 2016). The success of audit committees in fulfilling their oversight responsibility is in relation with their working relationships with other players of corporate governance such as the board of directors, management, external auditors, internal auditors, legal counsels, professional institutes, standard-setting bodies (Rezaee et al, 2013).…”

Section: The Role Of Internal Audit Function On Corporate Governance and Managementmentioning

confidence: 99%

“…The audit committee plays a major role in corporate governance regarding the organization"s direction, control and accountability. It plays also an important role regarding the organization"s internal control to provide reasonable assurance about the ethical values of management and reliability of financial information (Al-Baidhani, 2016). If a company has a good structured audit committee then independent auditors" working will be supported.…”

Section: The Role Of Internal Audit Function On Corporate Governance and Managementmentioning

confidence: 99%

“…In last years, a growing industry has developed around the need and desire for improved corporate governance: accounting firms offer corporate governance compliance services, business schools offer corporate governance courses and there is a growing public interest in relation with corporate governance matters (Stein, 2008). Good corporate governance is now considered a basic criterion to accept a business in the majority of the Stock Exchange Markets in the world (Al-Baidhani, 2016). Internal auditing is considered a part of corporate governance.…”

Section: Introductionmentioning

confidence: 99%

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The Role of Internal Audit Function on Corporate Governance and Management

Kontogeorgis¹

2018

ijafr

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The purpose of the paper is to examine the research question about the role of internal audit function on management and corporate governance. This paper is updated with the latest theories regarding the role of internal auditing on management and corporate governance. It has been made literature review so as to be revealed the role of internal audit function on management and corporate governance. It is found that internal auditing is an important part of the success of corporate governance. Especially, it is one of the pillars of corporate governance. Furthermore, it is found that internal audit function is a vital tool for the management and for the success of a company. The good operation of internal audit function can be a tool for the improvement of quality of the corporate governance and management. Both corporate governance and management can increase the competiveness of a company.

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“…Wahba (2015) also argues that the mechanisms of CG should be assessed regularly. A wide range of CG mechanisms have been identified (Al-Baidhani, 2012) and broadly classified as either internal or external (Rezaee, 2007), but opinions vary on what should be in which category and the effectiveness of each mechanism.…”

Section: Corporate Governance Mechanismsmentioning

confidence: 99%

The Role of the Audit Committee as a Corporate Governance Mechanism: The Case of the Banking Sector in Libya

Masli

2018

SSRN Journal

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Financial scandals in developed countries such as the USA and the UK have highlighted the need for greater transparency and credibility in order to protect shareholders and stakeholders alike. It has been argued that the audit committee (AC) is a key mechanism for achieving this transparency and protecting shareholders' interests. While there have been numerous attempts to investigate AC practice and effectiveness in developed countries, little is known about how these committees operate in developing countries such as Libya. Therefore, this research aims to: (1) explore the current role of ACs in the Libyan banking sector, (2) investigate the factors that affect their performance and (3) identify actions to enhance their effectiveness.To achieve these aims, the study employed a combination of quantitative (questionnaire survey) and qualitative (semi-structured interviews) methods to understand how five groups of actors within Libya's banking sector (i.e. board and AC members, executive managers, and internal and external auditors) perceive the role and practice of ACs. The questionnaire survey was designed to collect initial data, while follow-up interviews sought to gain an in-depth understanding of all relevant aspects of the subject. In total, 218 survey responses were analysed, and 20 semi-structured interviews were conducted with senior directors and managers.

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The Nature of a Dynamic Relationship between Audit Committee and Auditors, Both Internal and External

Cited by 4 publications

References 12 publications

The effects of the internal control system on the risk, profitability, and compliance of the U.S. banking sector: A quantitative approach

The effects of the internal control system on the risk, profitability, and compliance of the U.S. banking sector: A quantitative approach

The Role of Internal Audit Function on Corporate Governance and Management

The Role of the Audit Committee as a Corporate Governance Mechanism: The Case of the Banking Sector in Libya

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