External auditor reliance on the work of the internal audit function in Jordanian listed companies

Journal article


Al-Sukker, Ashraf, Ross, Don, Abdel-Qader, Waleed and Al-Akra, Mahmoud. (2018). External auditor reliance on the work of the internal audit function in Jordanian listed companies. International Journal of Auditing. 22(2), pp. 317 - 328. https://doi.org/10.1111/ijau.12122
AuthorsAl-Sukker, Ashraf, Ross, Don, Abdel-Qader, Waleed and Al-Akra, Mahmoud
Abstract

This study investigates the factors that influence external auditor (EA) reliance on the work of the internal audit function (IAF) in Jordanian listed companies (JLCs). It evaluates the effect of internal auditor objectivity, competence and work performance as perceived by senior Jordanian EAs. The study employs a mixed method comprising a survey‐based factorial experiment in addition to semi‐structured interviews. The results, based on 35 fully‐crossed factorial experiments and nine interviews with senior EAs and external audit managers, show that IAF objectivity has the greatest influence on the EA's decision to rely on the work of the IAF, followed closely by IAF competence and IAF work performance. Further, there was a significant interactive effect between objectivity and competence, indicating that the EAs do not consider the influence of individual factors in isolation. In interviews, the EAs put forward many reasons for the importance of all three of the independent variables. Our results have direct implications for organizations as well as for professional bodies and regulatory authorities charged with encouraging the development of IAFs.

Keywordsaudit quality; External audit; internal audit
Year2018
JournalInternational Journal of Auditing
Journal citation22 (2), pp. 317 - 328
PublisherWiley-Blackwell
ISSN1090-6738
Digital Object Identifier (DOI)https://doi.org/10.1111/ijau.12122
Scopus EID2-s2.0-85050097303
Page range317 - 328
Research GroupPeter Faber Business School
Publisher's version
File Access Level
Controlled
Place of publicationUnited Kingdom
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