Does the expertise of outsourced IAF providers affect audit efficiency? Empirical evidence from an emerging market

IF 2.1 Q2 BUSINESS, FINANCE Pacific Accounting Review Pub Date : 2021-12-21 DOI:10.1108/par-04-2021-0044
S. Baatwah, W. Omer, Khaled Salmen Aljaaidi
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引用次数: 2

Abstract

Purpose This study aims to examine the effect on audit efficiency of outsourced internal audit function (IAF) providers with industry and/or firm-specific expertise. Drawing on relevant studies from external and internal audit literature, the authors assume that such IAF providers are associated with greater audit efficiency as proxied by audit report lag and audit fees. Design/methodology/approach Based on a sample of firms listed on the Omani capital market during 2005–2019, the pooled regressions are used to test the developed hypotheses. The authors use the market share approach to identify outsourced IAF industry expertise providers and tenure to measure the firm-specific expertise of outsourced IAF providers. Findings The authors find that industry outsourced IAF providers are not associated with shorter audit report lag and lower audit fees. The authors also find that firm-specific expertise outsourced IAF providers are associated with a greater reduction in audit report lag and audit fees. These conclusions are robust under a battery of analyses. The significant contribution of firm-specific expertise outsourced IAF providers to audit efficiency is incremental when abnormal audit report lag and audit fees analysis is conducted. Originality/value The results are the first to attest to the contribution of outsourced IAF with firm-specific expertise. They also show that industry expertise held by outsourced IAF providers does not contribute to audit efficiency.
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外包内部审计服务提供者的专业知识是否影响审计效率?来自新兴市场的经验证据
目的本研究旨在考察具有行业和/或公司特定专业知识的外包内部审计职能(IAF)提供者对审计效率的影响。根据外部和内部审计文献的相关研究,作者假设这些内部审计报告提供者与更高的审计效率有关,因为审计报告滞后和审计费用。设计/方法/方法基于2005-2019年在阿曼资本市场上市的公司样本,使用混合回归来检验所提出的假设。作者使用市场份额的方法来确定外包内部服务提供商的行业专业知识和任期来衡量外包内部服务提供商的企业特定的专业知识。作者发现,行业外包内部审计服务提供商与较短的审计报告滞后和较低的审计费用无关。作者还发现,外包内部审计服务提供商的公司特定专业知识与审计报告滞后和审计费用的更大减少有关。经过一系列的分析,这些结论是可靠的。当进行异常审计报告滞后和审计费用分析时,外包内部审计服务提供者对审计效率的显著贡献是增量的。原创性/价值该结果首次证明了具有公司特定专业知识的外包IAF的贡献。它们还表明,外包内部审计服务提供商所拥有的行业专业知识无助于提高审计效率。
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来源期刊
Pacific Accounting Review
Pacific Accounting Review BUSINESS, FINANCE-
CiteScore
3.80
自引率
9.50%
发文量
36
期刊介绍: Pacific Accounting Review is a quarterly journal publishing original research papers and book reviews. The journal is supported by all New Zealand Universities and has the backing of academics from many universities in the Pacific region. The journal publishes papers from both empirical and theoretical forms of research into current developments in accounting and finance and provides insight into how present practice is shaped and formed. Specific areas include but are not limited to: - Emerging Markets and Economies - Political/Social contexts - Financial Reporting - Auditing and Governance - Management Accounting.
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