A Proposed Framework for Assessing and Interpreting the Factors that Determine the Effectiveness of Internal Audit "A Field Study"

Abstract

Due to the technological, Political, regulatory, economic changes that’s have occurred during the last decades have significantly affected basic functions, operations of the companies. In this respect, the rise of business risks, the economic instability and the importance increase of financial fraud scandals have necessitated the use of internal audit for companies. As the internal audit function has been constantly evolving in line with these changes in the business environment. Contemporary challenges in the environment are closely related to risk and associated corporate governance issues. Consequently, the effectiveness of internal audit lies in the auditor’s ability to achieve the established goals and objectives within the organization and if there is any barrier to achieve these goals, it will affect directly negatively not only the effectiveness of internal audit but also on the organization as a whole. Additionally, the internal audit surrounded by a group of threats that considered as obstacles toward ensuring its effectiveness. The ineffective internal audit will not be capable to effectively accomplish the organization's objectives and perform its significant role towards the improvement of governance and accountability. As the research problem previously mentioned, there is a significant importance of investigating the factors that determine the effectiveness of internal audit. Hence, the research discussed these factors as follows; (Internal auditors’ capabilities, characteristics of internal audit, Independence and objectivity of internal auditors, Effective audit committee and the reliance of external auditors on the internal auditors’ work) in terms of the existence of an effective Control environment.