The Impact of Audit Culture and Internal Control Systems on Audit Quality: The Case of Lebanese Banks

Abstract

The audit process is a representation of the engagement team's testing procedures. A company's culture and working procedures are two factors that might affect one's performance on the job. Leaders may message that they care about their and their audit firm's reputations by showing appreciation for high standards of audit quality and stressing the necessity of "doing the right thing" in the public interest. The Center for Audit Quality is only one part of the Audit Quality Disclosure Framework. There should be a clear emphasis on audit quality, and leaders should set the tone by doing so themselves. Only 300 employees from the businesses above participated in the research. Those 288 employees work for a wide variety of companies. This study’s findings shed light on the connection between strong internal controls and good governance in Lebanon’s banking sector. Senior management will focus on organizational compliance, the internal control system and monitoring methodologies, effective corporate governance, risk assessment, quality assurance, and independent forensic investigation since these are all prerequisites for an independent audit role. The chance of management undermining internal controls designed to identify and prevent fraud will decrease, and a more positive culture will result. Both managers will check that sufficient internal procedures are in place to safeguard corporate property.