Relationship between internal audit factors and corporate governance

Abstract

In the aftermath of major corporate financial scandals, corporate governance and internal control frameworks have been extensively developed and adopted by corporations worldwide. This study investigates the importance of internal audit in corporate governance and, simultaneously, the degree of importance of the internal auditor regarding corporate governance. An empirical survey was conducted by distributing a questionnaire in Greek firms listed on the Athens Stock Exchange. Regression analysis is used in order to illustrate the gathered information. The findings indicate that internal audit has a great impact on the effectiveness of corporate governance. More particularly, internal audit quality and internal audit senior management support are statistically significantly associated with enhanced corporate governance effectiveness, in contrast to the audit committee independence which is not statistically significant.