Journal of Commerce and Accounting Research

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Impact of Internal Audit Quality on Financial Stability


Affiliations
1 Assistant Professor, American University of the Middle East, Kuwait
2 Assistant Professor, Higher College of Technology, Muscat, Oman
     

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The objective of this study is to find out the effect of internal audit quality as an essential tool, for efficient and effective financial management and stability, which fulfills the financial goals of the firm. Due to the increasing importance of internal audit quality and the limited evidence on its impact on financial stability, we have examined the influence of internal audit on the financial aspects of companies. The study has drawn evidence from the data collected through a questionnaire and performing correlation analysis and simple regression on the audit, finance, and banking professionals. The findings assess and suggest a positive relationship between audit quality and financial stability. The research reveals the significant role of internal audit quality on the financials; high audit quality directly impacts the company’s level of financial stability. Based on the findings, awareness among the employees and management has to be maximised so that an understanding of the challenges and impact on financial stability can be assessed by the auditors. The paper will prove to be an essential contribution by providing substantial evidence regarding internal audit quality and financial stability.

Keywords

Internal Audit, Internal Audit Function, Audit Quality, Financial Stability, Audit Impact
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  • Impact of Internal Audit Quality on Financial Stability

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Authors

Suzan Dsouza
Assistant Professor, American University of the Middle East, Kuwait
Ajay Kumar Jain
Assistant Professor, Higher College of Technology, Muscat, Oman

Abstract


The objective of this study is to find out the effect of internal audit quality as an essential tool, for efficient and effective financial management and stability, which fulfills the financial goals of the firm. Due to the increasing importance of internal audit quality and the limited evidence on its impact on financial stability, we have examined the influence of internal audit on the financial aspects of companies. The study has drawn evidence from the data collected through a questionnaire and performing correlation analysis and simple regression on the audit, finance, and banking professionals. The findings assess and suggest a positive relationship between audit quality and financial stability. The research reveals the significant role of internal audit quality on the financials; high audit quality directly impacts the company’s level of financial stability. Based on the findings, awareness among the employees and management has to be maximised so that an understanding of the challenges and impact on financial stability can be assessed by the auditors. The paper will prove to be an essential contribution by providing substantial evidence regarding internal audit quality and financial stability.

Keywords


Internal Audit, Internal Audit Function, Audit Quality, Financial Stability, Audit Impact

References