Self-Perception of the Internal Audit Function Within the Corporate Governance System -- Empirical Evidence for the European Union

Download or read book Self-Perception of the Internal Audit Function Within the Corporate Governance System -- Empirical Evidence for the European Union written by Marc Eulerich and published by . This book was released on 2017 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: Internal audit (IA) is theoretically considered a key element of modern corporate governance. Surprisingly, the existing knowledge on IA and its relation to the internal corporate governance structure is miscellaneous and rare. Consequently, empirical findings on the internal audit function (IAF) within companies' corporate governance framework in the European Union (EU) are scarce. Due to this, the objective of our empirical analysis is to draw conclusions on the structural and process organization of the IAF within the overall corporate governance structure and the IAF's cooperation with the audit committee (AC). Based on data from 3,294 responses from the 2010 Common Body of Knowledge (CBOK) study on 26 EU-member states conducting structural equation modeling we find that IA is an important mechanism of corporate governance structures. IA creates “value added” for the company either within the meaning of revealing problems and grievances or in the sense of precautionary measures. It is a powerful element for management supervision in the one and two tier system.