Information Asymmetries and Intra-Company Monitoring: an Empirical Analysis of Nonlinear Relationships Between Company Characteristics and the Size of the Internal Audit Function

Marc Eulerich () and Christian Lohmann
Additional contact information
Marc Eulerich: University Duisburg-Essen
Christian Lohmann: University of Wuppertal

Schmalenbach Journal of Business Research, 2022, vol. 74, issue 1, 103-127

Abstract: Abstract The internal audit function (IAF) has become one of the main pillars of good corporate governance. Empirical findings show that the size of the IAF varies considerably across companies. This study analyzes the relationships between selected company characteristics as determinants of intra-company information asymmetries and the size of the IAF as an indicator of intra-company monitoring. We test these relationships by analyzing comprehensive survey data obtained from chief audit executives from 283 Austrian, German, and Swiss companies. Using a nonparametric regression approach, we identify significant nonlinear relationships between company characteristics and IAF size. The empirical analysis identifies threshold levels for several metric company characteristics, such as the number of employees and the number of subsidiaries, whose relationships with the size of the IAF change its intensity.

Keywords: Company characteristics; Company size; Internal audit; Internal audit function; Nonparametric regression; G34; M40; M49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s41471-021-00128-2 Abstract (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sjobre:v:74:y:2022:i:1:d:10.1007_s41471-021-00128-2

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/41471

DOI: 10.1007/s41471-021-00128-2

Access Statistics for this article

More articles in Schmalenbach Journal of Business Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().