Department
School of Accountancy
Document Type
Article
Publication Date
5-2006
Abstract
Internal audit quality is an issue of great importance to both the internal and external audit professions. PCAOB Auditing Standard No 2 highlights this importance when addressing the reliance that the external auditor can place on the internal audit work product. The study discussed here experimentally tests the influence of the source of the internal audit function on both the internal and external auditors' evaluation of the quality of the internal audit function. To assess the importance of the internal audit function's sourcing arrangement in the internal audit function's quality assessment, the researchers employ a case study approach, modifying a case that has been used in prior research. The researchers find that for three of the four measured internal audit function quality characteristics, there was no difference in the assessment of the internal audit function between internal and external auditors, regardless of whether or not the internal audit function was provided in-house or was outsourced to a CPA firm other than the external auditor's firm.
Journal Title
Internal Auditing
Journal ISSN
0897-0378
Volume
21
Issue
3
First Page
26
Last Page
30