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Interaction between internal auditors and the audit committee: An analysis of expectations and perceptions




This study, based on six case studies within a Belgian context, provides a qualitative assessment of the interaction between internal auditors (IA) and audit committees (AC), by analysing their expectations and perceptions. It became clear that both groups have high expectations vis-à-vis each other, although perceptions of IA-AC interactions are not universally positive. Our empirical data indicate that audit committee members want internal auditors to be an important information provider. Therefore they expect internal auditors to demonstrate and communicate, as much as possible, their contribution to the monitoring and functioning of the organisation, and to play both an active and proactive role in risk management. It became clear that, in most cases, due to a mismatch of interests, there is an under-emphasis on the internal audit oversight role of the audit committee, which is more perceived by the internal auditors than by audit committee members. In order to reduce this mismatch, both parties should broaden their interests in a converging way, in conjunction with clear communication about the mission and roles of internal audit.

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  • G. Sarens & I. De Beelde, 2006. "Interaction between internal auditors and the audit committee: An analysis of expectations and perceptions," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 06/357, Ghent University, Faculty of Economics and Business Administration.
  • Handle: RePEc:rug:rugwps:06/357

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    References listed on IDEAS

    1. Laura Spira, 1998. "An Evolutionary Perspective on Audit Committee Effectiveness," Corporate Governance: An International Review, Wiley Blackwell, vol. 6(1), pages 29-38, January.
    2. Patricia M. Dechow & Richard G. Sloan & Amy P. Sweeney, 1996. "Causes and Consequences of Earnings Manipulation: An Analysis of Firms Subject to Enforcement Actions by the SEC," Contemporary Accounting Research, John Wiley & Sons, vol. 13(1), pages 1-36, March.
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    7. Bradbury, Michael E., 1990. "The incentives for voluntary audit committee formation," Journal of Accounting and Public Policy, Elsevier, vol. 9(1), pages 19-36.
    8. Stuart Turley & Mahbub Zaman, 2004. "The Corporate Governance Effects of Audit Committees," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 8(3), pages 305-332, June.
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    Cited by:

    1. Cristina Boţa-Avram & Paula Ramona Răchişan, 2013. "Analysing The Similarities Between Oecd Principles Versus European Corporate Governance Codes - An Internal Audit Perspective," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 2(15), pages 1-15.
    2. Cristina Boţa-Avram, 2012. "Perceptions Over the Audit Committee Practices in the Context of Corporate Governance: Evidence From Romania," Journal of Knowledge Management, Economics and Information Technology,, vol. 2(5), pages 1-11, October.
    3. Cristina Bota-Avram, 2011. "Some Arguments That Justify The Audit Trinity’S Approach In The Context Of Corporate Governance," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 6(1), pages 5-18, April.

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    internal audit; audit committee; interaction; corporate governance; case studies.;
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