Journal of Economic and Administrative Sciences

Internal auditor characteristics, internal audit effectiveness, and moderating

effect of senior management
Khaled Ali Endaya, Mustafa Mohd Hanefah,
Article information:
To cite this document:
Khaled Ali Endaya, Mustafa Mohd Hanefah, (2016) "Internal auditor characteristics, internal audit
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

effectiveness, and moderating effect of senior management", Journal of Economic and Administrative
Sciences, Vol. 32 Issue: 2, pp.160-176, https://doi.org/10.1108/JEAS-07-2015-0023
Permanent link to this document:
https://doi.org/10.1108/JEAS-07-2015-0023
Downloaded on: 02 October 2017, At: 02:35 (PT)
References: this document contains references to 54 other documents.
To copy this document: permissions@emeraldinsight.com
The fulltext of this document has been downloaded 2230 times since 2016*
Users who downloaded this article also downloaded:
(2016),"Audit quality indicators: perceptions of junior-level auditors", Managerial Auditing Journal, Vol.
31 Iss 8/9 pp. 949-980 <a href="https://doi.org/10.1108/MAJ-01-2016-1300">https://doi.org/10.1108/
MAJ-01-2016-1300</a>
(2016),"Characteristics of the internal audit and external audit hours: evidence from S. Korea",
Managerial Auditing Journal, Vol. 31 Iss 6/7 pp. 629-654 <a href="https://doi.org/10.1108/
MAJ-05-2015-1193">https://doi.org/10.1108/MAJ-05-2015-1193</a>

Access to this document was granted through an Emerald subscription provided by emerald-
srm:551360 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald
for Authors service information about how to choose which publication to write for and submission
guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as
well as providing an extensive range of online products and additional customer resources and
services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the
Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for
digital archive preservation.

*Related content and download information correct at time of download.


JEAS
32,2
160
Received 24 July 2015
Revised 8 February 2016
Accepted 13 September 2016
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)
Journal of Economic and
Administrative Sciences
Vol. 32 No. 2, 2016
pp. 160-176
© Emerald Group Publishing Limited
1026-4116
DOI 10.1108/JEAS-07-2015-0023
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1026-4116.htm
Internal auditor characteristics,
internal audit effectiveness,
and moderating effect of
senior management
Khaled Ali Endaya
Faculty of Economics and Trade in Tarhuna,
Azzaytuna University, Tarhuna, Libya, and
Mustafa Mohd Hanefah
Faculty of Economics and Muamalat,
Universiti Sains Islam Malaysia (USIM), Nilai, Malaysia
Abstract
Purpose – The purpose of this paper is to investigate the direct relationship between internal
auditor’s characteristics[1] and internal audit effectiveness[2], and the moderating effect of senior
management[3] support.
Design/methodology/approach – Standard multiple regression and moderated multiple regression
are applied, and the data were collected from 114 members of Libyan Association of Accountants and
Auditors[4] by using personally administered questionnaire.
Findings – The findings reveal that internal auditor’s characteristics have a significant impact on
internal audit effectiveness, and senior management support has a moderating effect.
Practical implications – The findings would encourage Libyan organizations to concentrate on the issue
of internal audit effectiveness, and will strengthen the capacity of internal auditing in public organizations.
Originality/value – This paper contributes to the literature of both internal audit and management
studies and represents the first effort to examine the impact of internal auditor’s characteristics on
internal audit effectiveness with senior management support as a moderating variable.
Keywords Senior management, External auditor, Internal audit effectiveness,
Internal auditor characteristics
Paper type Research paper
1. Introduction
Internal audit has become a crucial function within organizations due to the recent
spate of corporate collapses and financial scandals (Schneider, 2003; Arena and Azzone,
2006). These events made internal audit as one of the contributing factors toward good
corporate governance, and has strongly influenced on the adoption and practice of the
internal audit. The effectiveness is a key issue for those interested in internal audit such
as internal auditors themselves or its main customers, namely: the board and the audit
committee, to whom internal audit reports; senior management, who should be sure
that internal audit activities cover the principal business risks; and external auditors,
who have a direct interest in the work of internal audit (Brilliant et al., 1997; Mihret
et al., 2010; Lenz and Hahn, 2015). However, there is difference in perspectives among
those interested groups, for example, external auditors and audit committee are more
interested in assurance regarding controls (Hermanson and Rittenberg, 2003), while
senior management wants the internal auditor to provide both assurance and
consulting (Sarens and Beelde, 2006). This difference partly contributed to the
incompatibility among researchers about the factors influencing internal audit
 effectiveness and how we can measure it (Arena and Azzone, 2009). Hence, a special Moderating
investigation for each group becomes a necessary requirement, and this study aims to effect of senior
examine the influence of some factors on the effectiveness of internal auditing from the
perspective of external auditors.
management
There are several reasons why internal audit effectiveness remains a continuously
relevant issue. First, the role of internal audit of a company is considered important in
the corporate governance field (Bostan and Grosu, 2010). Second, the effectiveness of 161
internal audit is a new research area in internal auditing (Sarens, 2009), so only few
studies have studied it worldwide, and several researchers have recommended the need
for more research especially in developing countries (Al-Twaijry et al., 2003; Mihret and
Yismaw, 2007; Yee et al., 2008; Endaya and Hanefah, 2013). Third, as indicated earlier,
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

until today, there is no consensus among researchers either about the factors
influencing, or the best framework for the effectiveness of internal auditing (Endaya
and Hanefah, 2013). Thus, this study intends to contribute in this area of research.
This study also aims to examine the direct relationship between internal auditor’s
characteristics and internal audit effectiveness. The current study argues that
individual characteristics of internal auditors are necessary for internal audit
effectiveness. This view is supported by International Standards for Professional
Practice of Internal Auditing (ISPPIA), which adopts these characteristics as attributes
for both organizations and individuals (Institute of Internal Auditors (IIA), 2012). This
study also examines senior management support as moderating variable on the above
relationship. The current study argues that, only when senior management has the
interest and urge to support activities will ensure internal audit effectiveness. The
current study complements the few existing research that studied the importance of
senior management support such as Sarens and Beelde (2006), Sterck and Bouckaert
(2006), Schneider (2008), Arena and Azzone (2009), Soh and Martinov-Bennie (2011), and
Lenz and Hahn (2015). For example, Sarens and Beelde (2006) argue that the acceptance
and appreciation of internal audit within the company depends entirely on senior
management support. Similarly, Schneider (2008) confirms that the degree to which senior
management commits to implement the recommendations of internal audit has a
significant impact on the effectiveness of internal auditing. Arena and Azzone (2009)
measured the effectiveness of internal auditing as a percentage of recommendations
suggested by internal auditors and those implemented by senior management. In addition,
Sterck and Bouckaert (2006) and Soh and Martinov-Bennie (2011) considered the
relationship of internal auditing with senior management in terms of support and
reporting lines as crucial in contributing to internal audit effectiveness. Moreover, Lenz
and Hahn (2015) confirm that the relationship between internal audit and its main
customers including senior management will continue to be an important research field.
The limited research and the lack of empirical study in this particular area motivate
this study. First, the majority of previous studies have examined the existence of these
characteristics at the department level and ignored at the individual level. Second,
no attention has been given in previous studies, to examine the moderating role of
senior management support on the relationship between internal auditor’s
characteristics and internal audit effectiveness.
The current study extends the investigation in one of the key issues for auditing:
assessment of internal audit effectiveness from the perspective of external auditors
using data collected from Libya for the following reasons. First, external auditing
standards (SAS No. 9, SAS No. 65, and ISA 610), that originated in the developed
countries and have been adopted by developing countries, recommend external
 JEAS auditors to evaluate internal audit effectiveness when relying on the work of internal
32,2 auditors. This reliance assists in achieving audit efficiency, and the level of this reliance
may also vary accordingly (Mihret and Admassu, 2011). This reliance depends on
external auditors’ perceptions about the role and effectiveness of internal audit, and
external auditors rely on the work performed by internal auditors only when they are
sure about the effectiveness of internal auditing (Al-Twaijry et al., 2004; Endaya, 2014).
162 Second, effective coordination and cooperation between internal and external auditors
lead to several benefits for them and also for the clients whom they serve (Endaya,
2014), and the benefits for external auditor could include a decrease in the size of audit
sample and its processes. This case could finally lead to saving time and cost of the
audit (Wallace, 1984; Felix et al., 2001; Ho and Hutchinson, 2010; Mat Zain et al., 2015).
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

Third, external auditing is mandatory for Libyan firms (Libyan Commercial Law
No. 1953, Articles 580 and 583; the Income Tax Law No. 7/2010, Articles 49 and 71), and
the audit process must be completed no later than the four months after the end of the
year (the Income Tax Law No. 7/2010, Articles 49 and 71). Therefore, as a result of the
limited time available for the external auditors and to save cost, Libyan auditors rely on
the work of internal auditors in many respects in carrying out their duties. This view is
supported by Agbara (2011) who noted that, most of Libyan external auditors relied, to
some extent, on the work of the internal auditors. Fourth, limited research about
internal auditing in Libya as a developing country (Abuazza et al., 2015) increases the
importance of achieving this study.
The findings are particularly interesting, as it confirms both the crucial role of senior
management support on internal audit effectiveness as well as its moderating effect on
the direct relationship between internal auditor’s characteristics and internal audit
effectiveness. This result contributes to both audit and management fields by studying
the relationship between internal audit and senior management, and extends to other
relevant and related areas too. The findings of the study will be useful to other
developing and developed countries. As with other studies, this study has its own
limitations. Therefore, the current study emphasizes the need for further research in
this new context and encourages it.
The remainder of this study is structured as follows: Section 2 provides the literature
review and hypotheses development; Section 3 covers the methodology; Section 4 contains
the empirical results. The study ends with a summary and conclusion.

2. Literature review and hypotheses development

2.1 Prior studies
Literature on internal audit effectiveness in the 1980s and 1990s focused more on this
issue from the perspective of external auditors at the departmental level by examining
the three factors proposed by AICPA (SAS No. 9, SAS No. 65), which included
competence, objectivity, and performance of internal audit department. Studies such as
Brown (1983), Schneider (1984), Messier and Schneider (1988), and Maletta (1993) have
attempted to understand external auditors’ rank ordering of the importance of these
factors without an explicit attempt to model the interactions among these factors
(Krishnamoorthy, 2002). According to Krishnamoorthy (2002) it is futile to attempt a
ranking of these factors since there is no single factor that can be considered dominant
under all conditions. Schneider (2010) argues that, these factors are integrated when the
external auditors make their decisions on internal auditing. Although ISPPIA has
adopted these characteristics as attributes that must be applied for both the
organizations and individuals (IIA, 2012), past researches have not given adequate
 attention to study the relationship between internal auditor’s characteristics and Moderating
internal audit effectiveness. effect of senior
Sarens and Beelde (2006) based their study on five case studies within Belgian
companies found that the senior management expectation has a significant influence
management
on internal auditing, and the internal auditing meets most of these expectations. The
results of the study also indicate that, senior management expects internal audit to:
first, compensate for management loss of control due to organizational complexity; 163
second, safeguard the corporate culture through personal contacts with people in
the field; third, be a supportive function in the monitoring and improvement of both the
risk management and internal control system; fourth, be a training ground for future
managers; and fifth, cooperation between internal and external auditors increases audit
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

coverage. On the other hand, internal auditors expect the senior management to take
the first step in the formalization of the risk management system. They look for the
support and overall acceptance from senior management.
Mihret and Yismaw (2007) identified factors that have an impact on the effectiveness of
internal audit services, based on public sector higher educational institutions in Ethiopia.
Their model consisted of four interrelated factors: internal audit quality, management
support, the organizational setting, and attributes of the auditees. Their findings indicate
that internal audit effectiveness is strongly influenced by internal audit quality and
management support. In contrast organizational setting and auditees attributes do not
have a strong impact on internal audit effectiveness. The researchers also suggest a need
for future research to fully understand internal audit effectiveness by using other variables.
In a related study, Halimah Ahmad et al. (2009) attempted to explore the significance of
internal auditing in the Malaysian public sector, and its subsequent extent and influence
in the public sector hierarchy and decision making. Their findings indicate that internal
auditing is curtailed by under-staffing and hampered by inadequate support from top
management, while the auditors seldom extend their full cooperation. The auditors
themselves lack appropriate knowledge and training on effective auditing approaches.
The negative perception accorded to internal audit led to inaction by management on
recommended remedies, which only serve to nullify the positive contribution of internal
audit that strives to elevate the service delivery quality of the public sector.
Arena and Azzone (2009) studied the effectiveness of internal auditing by dividing
the internal auditors into three different groups according to their opinions as follows:
the first group related the effectiveness of internal audit with the quality of internal
audit procedures, the second group related internal audit effectiveness to the output of
internal audit activities and finally, the third group related it to the outcome of the audit
activities. Arena and Azzone (2009) measured the effectiveness of internal auditing by
the level of internal audit recommendations implemented by senior management.
Sarens (2009), in his editorial review on 22 papers presented in the Academic
Conference on Internal Audit and Corporate Governance, which was held in Rotterdam,
the Netherlands, in April 2008, recommended that the characteristics of both internal
audit and individuals as crucial areas for future research in internal audit effectiveness.
Research in this area would provide invaluable input for educating and training of
future internal auditors.
Endaya and Hanefah (2013) argued that agency theory, institutional theory, and
communication theory as appropriate theories for building a theoretical framework of
internal audit effectiveness, and suggested a model that comprises internal auditor’s
characteristics and internal audit department performance as factors that influences
directly the internal audit effectiveness, and organization member support as a
 JEAS moderating factor. They too suggested that the theoretical framework proposed in their
32,2 study needs to be further studied in future studies.
Lenz and Hahn (2015) provided a synopsis of literature about internal audit
effectiveness during the last decade, and suggested a multifaceted model comprising
macro and micro factors that impact internal audit effectiveness. The macro factors, in
their model, comprise four key dimensions or categorical blocks: organizational factors,
164 internal audit resources, internal audit processes, and internal audit relationships, while
the micro factors comprise the following three institutional forces: compliance with
laws and regulations (coercive force), consultation or professional bodies (normative
force), and learning from mimicking others’ (good) practice and prescriptions from
consulting firms (mimetic force). According to them the relationship between internal
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

audit and senior management will continue to be an important research field.

The current study complements the prior studies referred to above. In the current
study, while agency theory is mainly employed to understand economic motives that
make internal auditors embark on an ongoing quest to achieve their personal interests
even if they were against the organization members’ interests or organization interests,
institutional theory explains more about the level of compliance with standards for the
professional practice of internal audit and its auditors, and its impact on companies’
support of internal audit (Endaya and Hanefah, 2013).

2.2 Hypotheses development

This section displays the hypotheses of study based on the literature and the
arguments provided by this paper.
Objectivity is a key element of internal audit effectiveness (Schneider, 2003). Internal
auditors should have personal objectivity that permits the proper performance of their
duties, and must have an impartial, unbiased attitude, and avoid any conflict of interest (IIA,
2012, Sec. 1120). Professional bodies (American Institute of Certified Public Accountants
(AICPA), 1975, 1991; IIA Standards; International Federation of Accountants (IFAC), 2009)
have demanded the objectivity of internal auditing, and also several studies have
considered objectivity as a significant element for internal auditing (Brown, 1983; Schneider,
1984, 2003; Messier and Schneider, 1988; Maletta, 1993; Stewart and Subramaniam, 2010). In
these studies, objectivity was measured by organizational status of internal auditing and its
reporting level. Despite the importance of these elements for internal audit objectivity at the
department level, however, their presence do not mean simply the existence of objectivity
when there is any threat for objectivity at the individual level.
Several studies too noted the importance of effective communication (Endaya and
Hanefah, 2013). Also, ISA 610 (2009) issued by IFAC requires external auditors to
evaluate the effective communication when using the work of internal auditors. Mihret
and Yismaw (2007) consider effective communication as part of the internal audit
quality, which is considered one of the important variables that influence the
effectiveness of internal auditing.
Standards issued by professional bodies (AICPA, 1975, 1991; IIA Standards; IFAC,
2009) demand proficiency and due professional care (competence) of internal auditors,
and several studies (Brown, 1983; Schneider, 1984, 1985, 2003; Messier and Schneider,
1988; Maletta, 1993) have considered proficiency and due professional care as a
significant element of internal auditing.
The Institute of Internal Auditors requires all its members to attend continuous
professional development programs. Several studies considered training and development
as part of the competence of internal auditor (Brown, 1983; Schneider, 1984; Messier and
 Schneider, 1988). As such, in this study due professional care is argued important for the Moderating
internal auditors, and even more important is the training and development to improve effect of senior
their professional performance.
The relationship among the above characteristics is clear. For example, internal
management
auditors must possess the knowledge, skills, and other competencies that are needed to
achieve their individual responsibilities (proficiency and due professional care), and the
only way for internal auditors to continue this professional conduct is by undergoing 165
proper training and development program. On the other hand, professional judgment
will lose value when there is any doubt about objectivity of internal auditors.
The internal auditors work can fail if it is not communicated effectively.
As discussed above, this study expects internal auditor’s characteristics to influence
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

the effectiveness of internal auditing. Thus, the following hypothesis is proposed:

H1. Internal auditor’s characteristics are positively related to internal audit
effectiveness.
Although a number of findings show that there is a relationship between internal
auditor’s characteristics and internal audit effectiveness, it nevertheless depends on
senior management support. For example, senior management actions have a
significant impact on the relationship between objectivity and internal audit
effectiveness. More specifically, when senior management does not interfere in
internal audit scope and allow unrestricted auditing work on them, the impact of
objectivity on internal audit effectiveness is higher. Conversely, senior management
interference or restriction in internal audit scope has a negative impact. In addition,
open and candid communications between chief internal auditor and senior
management, and the encouragement for feedback during the communication
process, without any doubt, have a significant impact on this relationship. Undeniably
training and computer programs provided by the senior management helps to enhance
the knowledge and skills of the internal auditors. However, this can only be achieved if
sufficient budget is allocated annually for such purpose. This budget is reviewed and
approved by senior management. Therefore, an adequate internal audit budget for
training programs strongly depends on the support of senior management. Also, in
prior literature, no study was undertaken to examine the impact of senior management
support as a moderating variable. Therefore, this study expects senior management
support to moderate the relationship between internal auditor’s characteristics and
internal audit effectiveness. The second hypothesis is as follows:
H2. The relationship between internal auditor’s characteristics and internal audit
effectiveness is moderated by senior management support.

3. Methodology
3.1 Population and sample of the study
The population of this study comprised different auditing firms located in Tripoli wherein
the majority of Libyan audit offices are located including the big ones. The subjects of this
study were limited to the members of Libyan Association of Accountants and Auditors
(LAAA). Registration as a LAAA’s member requires at least a bachelor’s degree in
accounting and five years’ experience of accounting work in audit office after graduation.
These education and experience conditions provide a guarantee on the ability of LAAA’s
members to evaluate internal audit effectiveness. Also due to political uncertainties during
the study period, the exact number of LAAA members and the number of auditing firms
 JEAS located in Tripoli were not available. Therefore, convenience sampling was used to collect
32,2 data during the first quarter of 2015.
To increase the anticipated response rate for the empirical study, this study has
adopted the following steps. First, this study adopts the personally administered
questionnaire, which normally, in Libya as a developing country, has the highest
response rate. Second, this study also adopts collection data through audit offices,
166 because data collection process through audit offices is easier than collecting from
individuals directly, and allows access to the largest number of the target sample.
On the other hand, to increase the internal validity, participants were advised not to
discuss the questions and answers with their colleagues and they were also requested
to return the questionnaire once it was completed.
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

Tabachnick and Fidell (2007) suggest the following formula for calculating sample
size: n W 50 + 8 m (where m ¼ number of variable). Thus, 74 subjects were required for
this study, but in order to ensure a higher response rate, 150 LAAA’s members were
chosen for the distribution of the questionnaire. To minimize the impact of the size of
the office on the sample size, only three LAAA members were chosen from each firm.
This approach is similar to the method adopted by Zuraidah Mohd Sanusi et al. (2009),
whereby only six external auditors from each audit firm were chosen for their study.
The survey involved the following phases: pretest and actual survey. The questionnaire
was pretested by four academics specializing in accounting including two LAAA
members. The purpose was to confirm that terms and items used were adequate and
suitable for the study. Based on the comments collected from the pretest, the questionnaire
was reviewed and amended. The survey implementation followed three steps: initial
submission, first follow up, and second follow up. In the first step, three LAAA members
from each firm were given the questionnaires. The first follow-up was done through phone
call for their cooperation and reminder to complete the questionnaire and returning it
within one week, while the second follow-up was done through visiting these offices to
collect the questionnaires from those who answered and a reminder to others.
A few of the audit offices did not allow questionnaires to be sent to their audit staff
due to various reasons including being too busy or very tight schedule. Furthermore,
some LAAA members could not be reached because their office had moved elsewhere.
From 150 questionnaires distributed, 121 were returned, and seven questionnaires
(two due to missing values, and five due to outliers) were found to be not suitable.
The respondent’s profile is in Table I.
Table I shows that all respondents have high educational background; this is in line
with LAAA’s requirements for registration as a LAAA member, which requires at least
a bachelor’s degree in accounting (78.9 percent). Majority (43.0 percent) of them have
more than ten years of auditing experience. Most of the respondents too are from audit
firms with less than five members (46.5 percent). Nevertheless, the respondents do
represent all sizes of the audit firms.

3.2 Variable measurement

Internal auditor’s characteristics in this study include four dimensions covering 12 items.
Three items identified by Mutchler (2003) to measure the objectivity, three items to
examine the relationship between internal auditor and auditees (Smith, 2005), and to
measure effective communication were used in this study. Another three items used by
previous studies such as Ahmad et al. (2009), Schneider (2008), and Ali et al. (2007) to
measure the proficiency and due professional care, and three items used by Desai and
Desai (2010), Ali et al. (2007), Haron et al. (2004), Messier and Schneider (1988),
 Items Frequency Percentage
Moderating
effect of senior
Position management
Chief audit executive officer 36 31.6
Chief of audit team 19 16.7
Member of audit staff 59 51.7
Total 114 100.0
167
Educational certification
Bachelor degree 90 78.9
Master degree 21 18.5
PhD degree 3 2.6
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

Total 114 100.0

Experience as auditor
Less than 5 years 27 23.7
5-10 years 38 33.3
More than 10 years 49 43.0
Total 114 100.0
Size of audit office
Less than 5 auditors 53 46.5
5-10 auditors 30 26.3
More than 10 auditors 31 27.2 Table I.
Total 114 100.0 Respondents profile

Schneider (1984), and Brown (1983) to measure training and development were also
adopted in this study. The internal auditor’s characteristics are measured on a five-point
Likert scale ranging from 1 ¼ not at all to 5 ¼ strongly influence.
Senior management support is measured by its actions and its requests that aim to
strengthen internal auditing. In this study, senior management support is measured
based on four items developed by ISPPIA and used by previous studies such as Mihret
and Yismaw (2007), Mousa (2005), Golen (2008), and Smith (2005). Items of senior
management support are measured on a five-point Likert scale ranging from 1 ¼ not at
all to 5 ¼ strongly influence.
As mentioned earlier, there is no agreement among researchers about measuring the
effectiveness of internal auditing. Audit researchers relate it either to the quality of
internal audit procedures, output of activities or outcome of activities (Arena and
Azzone, 2009). Lenz and Hahn (2015) argued that a number of researchers (Felix et al.,
2001; Krishnamoorthy, 2002) have considered internal auditing as an effective function
when meeting expectations of external auditors. Lenz and Hahn (2015) confirm that the
higher the utilitarian benefit for external auditors leads to the higher internal audit
effectiveness from external auditors’ perspective. External auditors, as a main user of
the internal auditing report, are more interested in assurance regarding controls
(Hermanson and Rittenberg, 2003), and one of the main benefits for them is internal
auditors evaluation of the internal control system (Hasnah Haron et al., 2004). As such,
the effectiveness of internal auditing from the perspective of external auditors
depends on the effectiveness of internal control system in auditee’s organization.
The effectiveness of internal auditing is very important for the management as well as
the external auditors. The outcomes of internal auditing address a wide range of
aspects, i.e. the output of the audit process (Arena and Azzone, 2009). This includes the
effectiveness of the internal control system in auditee’s organization (Dittenhofer, 2001).
 JEAS In this study, internal audit effectiveness is measured based on items used by
32,2 Dittenhofer (2001), who considered internal auditing as effective only when it can be
determined that the auditee’s organization is effectively complying with policies,
procedures, laws, and regulations (Dittenhofer, 2001). Therefore, four items in this
study are used to measure internal audit effectiveness from external auditors’
perspectives. Participants in this study were asked to rate the effectiveness of internal
168 auditing by using five-point Likert scale ranging from 1 ¼ not important at all to
5 ¼ very important.

4. Data analysis and discussion

Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

In this study, outliers were detected using box plots; five cases were found as outliers and
deleted from data analysis. The reliability is identified by computing its Cronbach’s α
coefficient, and the values were greater than 0.7. Content validity was used to check the
validity before the questionnaire was pre-tested. One-way analysis of variance (ANOVA) is
also conducted to test whether there is any statistically difference in respondents’
evaluation on internal audit effectiveness as the dependent variable of this study related to
respondents’ position, educational certification, experience, or the size of audit office.
ANOVA results show that it is not statistically significant ( pW0.05). The results indicate
that the evaluation is affected by a number of interlaced factors, which sometimes are
conflicted in their impact. For example, experience could have a significant influence in
respondents’ evaluation when there are no differences related to other factors such as
educational background or professional certification. Respondents who have high
educational background and low experience could have similar perception with
respondents who have high experience and low educational background. In other
words, educational certification reduces the influence of experience.
Tables II, III and IV present the results of descriptive statistics of this study. It is
observed that proficiency and due professional care have the highest mean of 4.19

Items Mean SD Min Max

Self-review 4.34 0.529 3 5

Economic interest 4.25 0.508 3 5
Relationship 3.69 0.566 2 5
Internal auditor’s objectivity 4.09 0.460
Report indicates to both of good and wrong performance 3.48 0.641 2 5
The content of the report is discussed with the auditee’s management before
issuing the final report 3.39 0.760 2 5
Auditee’s management comments are included in the report 2.99 0.672 2 5
Effective communication 3.29 0.574
Experience or knowledge about auditing 4.25 0.607 3 5
Professional certification 4.23 0.498 3 5
Educational background 4.10 0.532 3 5
Proficiency and due professional care 4.19 0.486
Continuing professional development program 3.75 0.561 3 5
Training policy includes both of in-house and outside 3.32 0.569 2 4
Table II. In-house training programs are available to new internal auditors 3.09 0.541 2 5
Descriptive statistics – Training and development 3.38 0.457
internal auditor’s Notes: The scale used: 1, not influence at all; 2, little influence; 3, somewhat influence; 4, influence;
characteristics 5, strongly influence
 (see Table II), which is consistent with the findings of prior studies such as by Maletta Moderating
(1993) and Haron et al. (2004), followed by internal auditor’s objectivity with 4.09, training effect of senior
and development (mean ¼ 3.38) and effective communication (mean ¼ 3.29).
The explanation of these results could be related partly to the relatively fewer previous
management
audit studies on the role of effective communication and training in enhancing the
performance of internal auditing compared to the studies about the role of objectivity and
competence. Thus, the results are relevant for researchers and policy makers in this area. 169
The descriptive statistics (see Table III) show that senior management support is
one of the significant variables for internal audit effectiveness (mean ¼ 4.06), and the
findings reveal that all items have strong influence on its effectiveness (mean W 3.5).
This result confirms strongly that, internal auditors need senior management support
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

for the effectiveness of their audit work. For that, internal auditors must have the full
support of the senior management to carry out their duties without any obstacles.
These acts of senior management increase the confidence of internal auditors, which
will eventually lead to internal audit effectiveness.
The descriptive statistics (see Table III) also reveal that open communication between
chief audit executive and senior management (mean ¼ 3.65) has a strong influence on the
assessment of internal audit effectiveness. This is in line with the suggestion by Hahn
(2008) that one of the barriers that can cause much harm to the organization is
communication complexity. He added that solving such a problem necessitates the
recording of information in clear and simple manner for understanding and feedback.
The above findings support the argument by Sarens and Beelde (2006) and
Schneider (2008) that internal audit effectiveness is highly dependent on senior
management’s support to act on the audit recommendations. Peter (1994) argues that
the cooperation between senior management and internal auditors improves the
organization’s performance. The Libyan external auditors also perceive that senior

Items Mean SD Min Max

Issue statement requiring all organization’s department to follow the internal

audit recommendations 4.39 0.526 3 5
Internal auditing has unrestricted access to review senior management’s work 4.32 0.524 3 5
Does not charge the internal auditor to carry out operational works 3.86 0.650 2 5
Chief audit executive has open communication with senior management 3.65 0.638 2 5 Table III.
Total 4.06 0.448 Descriptive statistics –
Notes: The scale used: 1, not influence at all; 2, little influence; 3, somewhat influence; 4, influence; senior management
5, strongly influence support

Items Mean SD Min Max

Reliable financial statements 4.28 0.451 3 5

Financial controls 4.15 0.536 3 5
Auditee company complied with statutes and regulations 3.82 0.573 3 5
Auditee company complied with policies and procedures 3.62 0.555 3 5 Table IV.
Total 3.97 0.403 Descriptive statistics –
Notes: The scale used: 1, not important at all; 2, little important; 3, somewhat important; 4, important; internal audit’s
5, strongly important effectiveness
 JEAS management’s support is very important to ensure all recommendations by internal
32,2 auditors are strictly followed by all departments.
Table IV confirms the argument by Dittenhofer (2001) that internal auditing
becomes effective when the auditee’s organization is effectively complying with
policies, procedures, laws, and regulations.
The multiple regression results, as displayed in Table V, show that the internal
170 auditor’s characteristics is positively and significantly related to the effectiveness of
internal auditing. The results indicate that 38.7 percent (R2 ¼ 0.387) of the effectiveness
of internal auditing is explained by the independent variable. The R2 was statistically
significant with F ¼ 70.712 and p o 0.01.
To test the moderating effect of senior management support on the above
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

relationship the Moderated Multiple Regression (MMR) was used. According to Frazier
et al. (2004), MMR is the preferred statistical method for examining moderator effects.
Based on Frazier et al. (2004) and Bennett (2000) recommendations, a predictor
variable (internal auditor’s characteristics) and a moderator variable (senior
management’s support) were standardized. Next, a new variable was created by
using the newly standardized variables (Z 1 ¼ Z-characteristics × Z-management).
Then, two steps of hierarchical regression were then conducted for the moderating
effect. In the first step of the regression, independent and moderator variables were
entered into the model as predictors of the outcome variable. In the second step, an
interaction term (independent variable × moderator variable) was then entered.
The findings show that the moderation effect of senior management’s support is
significant for the relationship between internal auditor’s characteristics and the
effectiveness of internal auditing (see Table VI). As shown in Table VI, the R2 increases
from 0.518 to 0.539. The interaction coefficient (standardised β) is also significant
(R2 change ¼ 0.022, b ¼ 0.151, p o 0.05).
Despite the importance of senior management support for internal audit
effectiveness, only few recent studies such as Mihret and Yismaw (2007) and Ahmad
et al. (2009) have considered it as an independent variable. From the results, it is clear
that the direct relationship between internal auditor’s characteristics and internal audit
effectiveness is dependent on senior management support. More specifically, only when
the activities of the internal audit are supported by senior management internal audit
effectiveness can be achieved.

5. Summary and conclusion

5.1 Summary and implications of the study
The findings indicate that internal auditor’s characteristics are positively and
significantly related to internal audit effectiveness, and senior management support is

Variable Coeff. ( β) SE β

Table V. Intercept 1.413 0.305

The regression Internal auditor’s characteristics 0.683 0.081 0.622***
models of internal R2 0.387
auditor’s Adj. R2 0.382
characteristics with F 70.712***
internal audit df (1,112)
effectiveness Notes: *p o0.10; **p o0.05; ***p o 0.01
 Model 1 2
Moderating
Internal audit’s Internal audit’s effect of senior
DV effectiveness effectiveness management
Variable Coeff. ( β) SE β Coeff. ( β) SE β

Intercept 3.967 0.026 3.934 0.030

Main effect 171
Z-score (characteristics) 0.155 0.032 0.386*** 0.142 0.032 0.352***
Z-score (management) 0.174 0.032 0.432*** 0.176 0.031 0.437***
Moderator effect
Z-score (characteristics) × Z-score Table VI.
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

(management) 0.061 0.027 0.151** Senior management

R2 0.518 0.539 support moderates
Adj. R2 0.509 0.527 the relationship
Change in R2 0.518 0.022 between internal
F 59.551*** 42.943*** auditors’
F change 59.551*** 5.210** characteristics and
df (2,111) (3,110) internal audit
Notes: *p o 0.10; **p o0.05; ***p o0.01 effectiveness

very important in this relationship. This is highlighted in the MMR, which shows that
internal auditor’s characteristics have a significant impact on internal audit
effectiveness, and senior management support has a moderating effect on the
relationship. The R2 increased from 0.518 to 0.539 and the interaction coefficient was
also significant. The findings are in line with the few existing research (Sarens and
Beelde, 2006; Sterck and Bouckaert, 2006; Schneider, 2008; Arena and Azzone, 2009;
Soh and Martinov-Bennie, 2011; Lenz and Hahn, 2015) that have confirmed the
importance of senior management support for internal audit effectiveness.
The findings strongly support the integrated relationship among individual
characteristics of internal auditors. The results are positively and significantly related
to internal audit effectiveness, the R2 was statistically significant with F ¼ 70.712 and
p o 0. 01. This is consistent with the ISPPIA, which has adopted these characteristics
as attributes for both organizations and individuals (IIA, 2012); however, previous
studies only examined the effect of objectivity and competence at the department level.
Thus, future study could be on how such characteristics should be considered for both
internal audit and its auditors.
Moreover, the findings provide an empirical evidence for the theoretical framework
proposed by Endaya and Hanefah (2013). The findings warranted attention as a result
of lack of empirical study in this particular area.
The findings of this study could have implications on the practice of the Libyan’s
internal audit in terms of the internal auditor’s characteristics as attributes for both
organizations and individuals, and also receiving enough support from senior management.
Moreover, the implications of this study are not restricted to Libyan environment and could
extend to the professional organizations and the auditors in other developing countries.
Furthermore, the implications of this study could extend to the corporate governance field
where the role of internal auditing is considered important. The current study also studies
the relationships among some elements of internal audit effectiveness from the perspective
of external auditors, which to-date still remains unresolved. Thus, the findings could have
implications on both audit and management literature.
 JEAS 5.2 Limitation and scope for future work
32,2 As with other studies, this study too has its own limitations. First, this study like
several previous studies used the questionnaire to collect the data. Thus, it is bound to
suffer from limitations associated with this method including response rates and bias.
However, this study attempted to minimize these disadvantages through: the use of
personally administered questionnaire, which normally has a higher response rate than
172 others, careful design and pre-testing the questionnaire, and directing it to external
auditors who are interested in internal audit effectiveness. Second, the sample was
limited to LAAA’s members in Tripoli wherein the majority of Libyan audit offices are
located including the big ones. Therefore, the findings are not necessarily generalizable
to all those interested in internal audit. Future studies can test this model by collecting
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

data from other interested groups in internal audit.

5.3 Conclusion
This paper provides evidence that internal auditor’s characteristics are positively and
significantly related to internal audit effectiveness, and senior management support is
very important in this relationship. The findings warranted attention as a result of lack of
empirical study in this particular area. The findings of this study complement prior
studies and provide some evidence for the theoretical framework proposed by Endaya
and Hanefah (2013). The results are consistent with the assertion in audit literature, and
could have some implications. As with other studies, this study has its own limitations.
Therefore, the current study emphasizes the need for further research in this new context.

Notes
1. Internal Auditor’s Characteristics; it refers to the attributes that each internal auditor should
have which include; objectivity, effective communication, proficiency and due professional
care, and training and development (Endaya and Hanefah, 2013).
2. In line with the objective of the study; internal auditing is considered effective when the
auditee organization is effectively complying with policies, procedures, laws, and regulations
(Dittenhofer, 2001).
3. Senior Management; a team of individuals at the highest level of organizational management
who have the day-to-day responsibilities of managing a company or corporation and they
hold specific executive powers conferred onto them with and by authority of the board of
directors and/or the shareholders (IIA, 2012).
4. Libyan Association of Accountants and Auditors (LAAA) is the regulatory body of the
accounting profession in Libya which was established by the Libyan government Law No.
116/1973. Paragraph 23 of this Law was limited to those practicing the profession is a
member of LAAA, as well as paragraph 24 which restricts membership to the citizens of
Libya only (Libyan Government, 1974).

References
Abuazza, W.O., Mihret, D.G., James, K. and Best, P. (2015), “The perceived scope of internal audit
function in Libyan public enterprises”, Managerial Auditing Journal, Vol. 30 Nos 6/7,
pp. 560-581.
Agbara, A.H. (2011), “An investigation into audit quality in Libya”, PhD thesis, University of
Gloucestershire, Cheltenham.
 Ahmad, H.N., Othman, R., Othman, R. and Jusoff, K. (2009), “The effectiveness of internal Moderating
audit in Malaysian public sector”, Journal of Modern Accounting and Auditing, Vol. 5 No. 9,
pp. 53-62.
effect of senior
Ali, A.M.D., Gloeck, J.D., Ali, A., Ahmi, A. and Sahdan, M.H. (2007), “Internal audit in the state and
management
local governments of Malaysia”, Southern African Journal of Accountability and Auditing
Research, Vol. 7 No. 1, pp. 25-57.
Al-Twaijry, A.A.M., Brierley, J.A. and Gwilliam, D.R. (2003), “The development of internal audit 173
in Saudi Arabia: an institutional theory perspective”, Critical Perspectives on Accounting,
Vol. 14 No. 5, pp. 507-531.
Al-Twaijry, A.M., Brierley, J.A. and Gwilliam, D.R. (2004), “An examination of the relationship
between internal and external audit in the Saudi Arabian corporate sector”, Managerial
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

Auditing Journal, Vol. 19 No. 7, pp. 929-944.

American Institute of Certified Public Accountants (AICPA) (1975), “The effect of an internal
audit function on the scope of the independent auditor’s examination”, Statement on
Auditing Standards (SAS) No. 9, AICPA, New York, NY.
American Institute of Certified Public Accountants (AICPA) (1991), “The auditor’s consideration
of the internal audit function in an audit of financial statement”, Statement on Auditing
Standards (SAS) No. 65, AICPA, New York, NY.
Arena, M. and Azzone, G. (2006), “Internal audit in Italian organizations: a multiple case study”,
Managerial Auditing Journal, Vol. 21 No. 3, pp. 275-292.
Arena, M. and Azzone, G. (2009), “Identifying organizational drivers of internal audit
effectiveness”, International Journal of Auditing, Vol. 13 No. 1, pp. 43-60.
Bennett, J.A. (2000), “Focus on research methods mediator and moderator variables in nursing
research: conceptual and statistical differences”, Research in Nursing & Health, Vol. 23 No. 1,
pp. 415-420.
Bostan, I. and Grosu, V. (2010), “The role of internal audit in optimization of corporate
governance at the groups of companies”, Theoretical and Applied Economics, Vol. 17 No. 2,
pp. 89-110.
Brilliant, D., Foley, L., Egan, D., Prince, D., Rushforth, J., Stewart, D. and Wynne, A. (1997),
“Report: guidance on internal audit – exposure draft”, Managerial Auditing Journal, Vol. 12
No. 7, pp. 358-374.
Brown, P.R. (1983), “Independent auditor judgment in the evaluation of internal audit function”,
Journal of Accounting Research, Vol. 21 No. 2, pp. 444-455.
Desai, R. and Desai, V. (2010), “Towards a decision aid for external audit evaluation of the
internal audit functions”, Journal of Global Business Issues, Vol. 4 No. 1, pp. 69-73.
Dittenhofer, M. (2001), “Internal auditing effectiveness: an expansion of present methods”,
Managerial Auditing Journal, Vol. 16 No. 8, pp. 443-450.
Endaya, K.A. (2014), “Coordination and cooperation between internal and external auditors”,
Research Journal of Finance and Accounting, Vol. 5 No. 9, pp. 76-80.
Endaya, K.A. and Hanefah, M.M. (2013), “Internal audit effectiveness: an approach proposition to
develop the theoretical framework”, Research Journal of Finance and Accounting, Vol. 4
No. 10, pp. 92-102.
Felix, W.L., Gramling, A.A. and Maletta, M.J. (2001), “The contribution of internal audit as a
determinant of external audit fees and factors influencing this contribution”, Journal of
Accounting Research, Vol. 39 No. 3, pp. 513-534.
Frazier, P.A., Tix, A.P. and Barron, K.E. (2004), “Testing moderator and mediator
effects in counseling psychology”, Journal of Counseling Psychology, Vol. 51 No. 1,
pp. 115-134.
 JEAS Golen, S. (2008), “Communication barriers between internal and external auditors”, ABEA
Journal, Vol. 27 No. 1, pp. 35-36.
32,2
Hahn, M. (2008), “Overcoming communication barriers in organizations”, available at: http://
ezinearticles.com/?Overcoming-Communication-Barriers-in-Organizations&id¼1033424
(accessed November 30, 2014).
Haron, H., Chambers, A., Ramsi, R. and Ismail, I. (2004), “The reliance of external auditors on
174 internal auditors”, Managerial Auditing Journal, Vol. 19 No. 9, pp. 1148-1159.
Hermanson, D.R. and Rittenberg, L.E. (2003), “Chapter 2: Internal audit and organizational
governance”, The Institute of Internal Auditors Research Foundation, FL, pp. 25-71.
Ho, S. and Hutchinson, M. (2010), “Internal audit department characteristics/activities and audit
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

fee: some evidence from Hong Kong firms”, Journal of International Accounting, Auditing
and Taxation, Vol. 141 No. 1, pp. 1-16.
Institute of Internal Auditors (IIA) (2012), International Standards for the Professional Practice of
Internal Auditing (Standards), The Institute of Internal Auditors, FL.
International Federation of Accountants (IFAC) (2009), “Using the work of internal auditors”,
International Standard on Auditing (ISA) No. 610, The International Federation of
Accountants, New York, NY.
Krishnamoorthy, G. (2002), “A multistage approach to external auditors’ evaluation of the
internal audit functions”, A Journal of Practice & Theory, Vol. 21 No. 1, pp. 95-121.
Lenz, R. and Hahn, U. (2015), “A synthesis of empirical internal audit effectiveness literature
pointing to new research opportunities”, Managerial Auditing Journal, Vol. 30 No. 1,
pp. 5-33.
Libyan Government (1974), “Law No. 116 of 1973 to organise the accounting profession in Libya”,
The Official Gazette, Tripoli (in Arabic).
Maletta, M.J. (1993), “An examination of auditors’ decisions to use internal auditors as
assistants: the effect of inherent risk”, Contemporary Accounting Research, Vol. 9 No. 2,
pp. 508-525.
Mat Zain, M., Zaman, M. and Mohamed, Z. (2015), “The effect of internal audit function quality
and internal audit contribution to external audit on audit fees”, International Journal of
Auditing, Vol. 19 No. 3, pp. 134-147.
Messier, W.F. and Schneider, A. (1988), “A hierarchical approach to the external auditor’s
evaluation of the internal auditing function”, Contemporary Accounting Research, Vol. 4
No. 2, pp. 337-353.
Mihret, D.G. and Admassu, M.A. (2011), “Reliance of external auditors on internal audit
work: a corporate governance perspective”, International Business Research, Vol. 4 No. 2,
pp. 67-79.
Mihret, D.G. and Yismaw, A.W. (2007), “Internal audit effectiveness: an Ethiopian public sector
case study”, Managerial Auditing Journal, Vol. 22 No. 5, pp. 470-484.
Mihret, D.G., James, K. and Mula, J.M. (2010), “Antecedents and organisational performance
implications of internal audit effectiveness: some propositions and research agenda”,
Pacific Accounting Review, Vol. 22 No. 3, pp. 224-252.
Mousa, F.R. (2005), “Developing a model for evaluating the effectiveness of the internal audit
function in Libyan organizations: case study with special reference to oil companies”,
PhD thesis, Manchester Metropolitan University, Manchester.
Mutchler, J.F. (2003), “Chapter 7: Independence and objectivity: a framework for research
opportunities in internal auditing”, The Institute of Internal Auditors Research
Foundation, FL, pp. 231-268.
 Peter, R. (1994), “Understanding internal audit”, Australian Accountant, Vol. 64 No. 3, Moderating
pp. 30-34.
effect of senior
Sanusi, Z.M., Iskandar, T.M. and Saleh, N.M. (2009), “Moderated-mediation effect of individual management
psychological differences on audit task performance: from the perspective of social
cognitive theory”, paper submitted to the International Symposium on Audit Research
(ISAR), Maastricht, June 26-27.
Sarens, G. (2009), “Internal auditing research: where are we going? Editorial”, International 175
Journal of Auditing, Vol. 13 No. 1, pp. 1-7.
Sarens, G. and Beelde, I.D. (2006), “The relationship between internal audit and senior
management: a qualitative analysis of expectations and perceptions”, International Journal
of Auditing, Vol. 10 No. 1, pp. 219-241.
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

Schneider, A. (1984), “Modeling external auditors’ evaluations of internal auditing”, Journal of

Accounting Research, Vol. 22 No. 2, pp. 657-678.
Schneider, A. (1985), “The reliance of external auditors on the internal audit function”, Journal of
Accounting Research, Vol. 23 No. 2, pp. 911-919.
Schneider, A. (2003), “An examination of whether incentive compensation and stock ownership
affect internal auditor objectivity”, Journal of Managerial Issues, Vol. 15 No. 4, pp. 486-497.
Schneider, A. (2008), “The relationship between internal audit and corporate management”,
Internal Auditing, Vol. 23 No. 5, pp. 12-20.
Schneider, A. (2010), “Analysis of professional standards and research findings to develop
decision aids for reliance on internal auditing”, Research in Accounting Regulation, Vol. 22
No. 2, pp. 96-106.
Smith, G. (2005), “Communication skills are critical for internal auditors”, Managerial Auditing
Journal, Vol. 20 No. 5, pp. 513-519.
Soh, D.S.B. and Martinov-Bennie, N.M. (2011), “The internal audit function: perceptions of
internal audit roles, effectiveness and evaluation”, Managerial Auditing Journal, Vol. 26
No. 7, pp. 605-622.
Sterck, M. and Bouckaert, G. (2006), “International audit trends in the public sector: a comparison
of internal audit function in the government of six OECD countries finds similarities in
legal requirements, organizational structure and future challenges”, Internal Auditor,
August, pp. 49-53.
Stewart, J. and Subramaniam, N. (2010), “Internal audit independence and objectivity: emerging
research opportunities”, Managerial Auditing Journal, Vol. 25 No. 4, pp. 328-360.
Tabachnick, B.C. and Fidell, L.S. (2007), Using Multivariate Statistics, 5th ed., Pearson Prentice
Hall, Boston, MA.
Wallace, W. (1984), A Time Series Analysis of the Effect of Internal Audit Activities on External
Audit Fees, Institute of Internal Auditors, FL.
Yee, C.S.L., Sujan, A., James, K. and Leung, J.K.S. (2008), “Perceptions of Singaporean internal
audit customers regarding the role and effectiveness of internal audit”, Asian Journal of
Business and Accounting, Vol. 1 No. 2, pp. 147-174.

About the authors

Khaled Ali Endaya is a Lecturer in Accounting at the Faculty of Economics and Trade in
Tarhuna, Azzaytuna University, Libya. He is currently the Head of the Accounting Department.
He has been teaching auditing curricula for ten years, and has practical experience for over seven
years in accounting and auditing functions at Libyan organizations. He is a Member of the
Libyan Association of Accountants and Auditors (LAAA), and he has published many papers in
 JEAS the areas of auditing and accounting. Khaled Ali Endaya is the corresponding author and can be
contacted at: khaled.endaya@yahoo.com
32,2 Mustafa Mohd Hanefah is a Professor of Accounting and Taxation, Faculty of Economics and
Muamalat, Universiti Sains Islam Malaysia. He is currently the Dean for Research and
Innovation, USIM, and was the Former Dean of the Faculty of Economics and Muamalat. He has
published many papers in international journals in the areas of financial reporting, taxation,
zakat awqaf, and Islamic financial reporting and accounting. He also serves as a Member of the
176 editorial boards in a number of international journals.
Downloaded by UNIVERSITAS TRISAKTI, User Usakti At 02:35 02 October 2017 (PT)

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: permissions@emeraldinsight.com