INFLUENCING FACTORS FOR INTERNAL AUDIT EFFECTIVENESS IN INDIAN CONTEXT

Back to Page Authors: Prem Lal Joshi

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Keywords: management support, internal audit effectiveness, audit committee, risk-based planning, big data and analytics, critical determinants, moderating role

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Abstract: In this study, an attempt is made to document and provide empirical evidence on the critical determinants of internal audit effectiveness in Indian Nifty 500 companies. IA effectiveness is arguably is a result of the interplay among different factors that may have an immense effect but have not been thoroughly investigated in Indian environment. A proportionate stratified sampling technique based on SEBI criteria is used to select companies from Nifty 500 Indian companies. The survey was conducted during January -April, 2020 and a total of 71 responses were received, however, 64 usable questionnaires are included for the final analysis. The response rate was 28.2%. Non-response bias and common method bias (CMB) were none existence in the data. Factor analysis and multiple regression are used. The results of the model show that ‘interaction between internal auditor and audit committee’, ‘risk-based planning and guidelines’ and ‘moderating role of management support with Big Data Analytics’ are the critical determinants for IA effectiveness in Indian context. The regression function is significant. The implications are that sound awareness to the listed companies on how internal audit effectiveness may be measured and what are the critical determinants that may potentially influence this effectiveness in the changing business and technological environment which are important for policy decision purposes

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