Internal Audit Function Quality and Corporate Governance: The Case of Greece

Christina Vadasi (), Michalis Bekiaris and Andreas Andrikopoulos
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Christina Vadasi: University of the Aegean, Greece
Michalis Bekiaris: University of the Aegean, Greece

Multinational Finance Journal, 2021, vol. 25, issue 1-2, 1-61

Abstract: Internal audit is fundamental in maintaining transparency in the dissemination of information about a company’s financial position and performance. In this respect, the quality of internal audit is essential for effective corporate governance. We construct a composite measure of the quality of the internal audit function and explore its association with "good" corporate governance. Employing data from 45 listed companies in the Athens Stock Exchange, we discover that "good" corporate governance affects internal audit function quality, since the internal audit function is better in companies that comply with certain corporate governance guidelines. On the other hand, we find limited evidence on the effect of internal audit function quality on effective corporate governance. We also discover that internal audit’s active role in corporate governance is shaped by company-wide characteristics such as size, internationalization and CEO duality.

Keywords: internal audit; internal audit function; quality; corporate governance; Athens Stock Exchange; survey (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (3)

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