Title: The influence of audit committee characteristics on investment in internal audit: the moderating role of family ownership

Authors: Muqaddam Oyetunji Ali; Wan Amalina Bt. Wan Abdullah

Addresses: Faculty of Business Management, Universiti Zainal Abidin, Terengganu, Malaysia ' Faculty of Business Management, Universiti Zainal Abidin, Terengganu, Malaysia

Abstract: This paper examines the influence of audit committee (AC) characteristics on investment in internal audit function (IAF) in Malaysia. Furthermore, the moderating role of family ownership on the relationship between investment in IAF and AC characteristics was examined in this study. A balanced panel data was employed. The data was obtained from the annual reports of the top 150 public listed companies in Bursa Malaysia from 2011 to 2019. The findings shows that investment in IAF is positively related to the frequency of AC meetings, but negatively related to the presence of accounting expert, percentage of independent directors and the average tenure of AC members. Also, the findings show that family ownership moderates the relationship between the characteristics of AC and investment in IAF. This result has implications for policymakers as the study suggest that IAF and AC are important corporate governance mechanism in ensuring quality of financial reporting.

Keywords: investment; internal audit function; audit committee characteristics; family ownership.

DOI: 10.1504/IJMFA.2022.126560

International Journal of Managerial and Financial Accounting, 2022 Vol.14 No.4, pp.295 - 322

Received: 05 Nov 2021
Accepted: 08 Feb 2022
Published online: 28 Oct 2022 *

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