Abstract
The internal audit is a primitive element for good corporate governance. This need has been largely felt in the developing countries to enhance and promote the corporate governance mechanism. This research evaluates the implication of internal audit of Multinational Corporations (MNCs) of Pakistan on corporate governance’s quality. The outcomes of this research reveal significance of internal audit role in corporate governance of MNCs. The significance of audit committee and management in this aspect is predominant. Similarly the results also show the vitality of corporate governance in terms of quality is significant when there is independent audit department with requisite expertise of auditing. However, the reliability of internal audit is primarily determines the characteristics of management of corporate governance. Contrary to this, the implication of internal audit is insignificant on the external audit workers as well as the board of directors of MNCs in Pakistan.
Highlights
This study adds on value in producing a greater understanding into the implication of quality of internal audit and corporate/organizational governance mechanisms in Multinational Corporations (MNCs) working in Pakistan
Correlation analysis Having obtained the critical value of ±0.240* at significance level of 5% and critical value of ±0.311** at a significant level of 1%, the following outcomes can be established: At 5% degree of significance, there is no connection and correlation exists between 3 internal Audit’s scores i.e. internal audit quality (IAQ)-1, IAQ-2, and IAQ-3 offered by correlation coefficient with lower level
This study evaluated the impact of internal audit quality in
Summary
This study adds on value in producing a greater understanding into the implication of quality of internal audit and corporate/organizational governance mechanisms in MNCs working in Pakistan. The significance and efficacy of these results is valuable for the regulators, investors, and overall stakeholders for their requisite concerns in terms of value creation and performance. The purpose of this paper is to estimate the implication of good internal audit practices on the organizational/corporate governing practices in MNCs of Pakistan. The relationship in terms of quality of internal audit performance and its due implications on organizational/corporate governance has been redefined in larger spectrum (Abdullah, 2014; Sarens, et al, 2012). The importance of sound internal audit performance and the up-to-mark mechanisms of organizational/corporal governance have becoming very imperative after the world financial crisis of 2007-09 (Mohamad & Sori, 2011).
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