Signalling of internal audit effectiveness

Jabile Brenda Pooe, Karin Barac, Kato Plant and Blanche Steyn

South African Journal of Accounting Research, 2022, vol. 36, issue 3, 213-249

Abstract: The internal audit function is increasingly recognised as an important internal governance mechanism and consequently factors that contribute to its effectiveness are now an area of great interest to researchers and practitioners. This study draws on signalling theory to fill a gap in the internal audit effectiveness (IAE) literature by investigating which IAE signals are sent by large South African companies in their company reports. Using a self-developed IAE signalling frame, a content analysis was performed on the integrated reports and other annual reports of the top 100 listed companies in South Africa over a five-year period. Thereafter a multiple correspondence analysis was used to extract IAE signals. The results revealed that IAE disclosure patterns of South African listed companies follow the normative dictates of the King Code and the Companies Act. The study also discovered a low average IAE disclosure rate linked to non-mandatory disclosure requirements. Disclosing more detail on IAE represents a missed opportunity to signal superiority through voluntary communication of the IAE signals especially on internal aspects such as management support for internal audit recommendations and the continuous professional development of internal auditors.

Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/10291954.2021.2000727 (text/html)
Access to full text is restricted to subscribers.

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:taf:rsarxx:v:36:y:2022:i:3:p:213-249

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rsar20

DOI: 10.1080/10291954.2021.2000727

Access Statistics for this article

South African Journal of Accounting Research is currently edited by Soon Nel

More articles in South African Journal of Accounting Research from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().