Determinants of Audit Effectiveness in Malaysia Cooperatives

Khairul Anuar Abdul Rashid and Intan Salwani Mohamed
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Khairul Anuar Abdul Rashid: Suruhanjaya Koperasi Malaysia
Intan Salwani Mohamed: Faculty of Accountancy & Accounting Research Institute, University Teknologi MARA, Cawangan Selangor, Kampus Puncak Alam, Selangor, Malaysia

International Journal of Research and Innovation in Social Science, 2025, vol. 9, issue 1, 5156-5164

Abstract: Malaysia’s cooperative sector, the third contributor to the country’s GDP, is vital for socio-economic development. The National Cooperative Policy (NCP) highlights the government’s commitment to enhancing the cooperative business model, especially for the benefit of marginalized communities. However, limited research on Malaysian cooperatives, particularly concerning their internal audit effectiveness, necessitates investigation. Given the pressing governance issues on trust violations and money laundering, this study is timely. It aims to supplement the Malaysian Cooperative Societies Commission’s (MCSC) guidelines by identifying factors influencing internal audit effectiveness, such as management support, internal auditor traits, auditee characteristics, and cooperative age. Data from 336 usable responses collected via questionnaires distributed to cooperatives in the Klang Valley reveal that internal audit attributes and auditee characteristics positively impact internal audit effectiveness. However, the study finds an insignificant relationship between two predictors, management support and cooperative age, on internal audit effectiveness. These findings can guide the MCSC in enhancing the role and function of internal audits within cooperatives.

Date: 2025
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