Internal Audit Reporting Effectiveness in Contexts of Superfluous Compliance: A Multi-theoretical Approach

Abstract

Examining the influence of various factors on internal auditing reporting effectiveness in a superfluous compliance environment is the prime objective of this empirical study. The effects of internal audit execution, audit behaviour and ethics, organisational culture, governance, and monitoring on the quality of internal auditing reporting were examined in a survey of 218 respondents, which included accountants and internal auditors. One control variable was the type of industry. In this study, three theories—the Agency, Institutional, and Social Identity theories—were connected and used. LinkedIn members who work as accounting and auditing professionals were able to take part in the survey by completing a self-made questionnaire that was made available online via Google Forms. After eliminating outliers, 58 replies from a 28.0% response rate were used for the study. Internal auditing reporting effectiveness (IARE) was found to be positively and significantly impacted by the variables "audit behaviour & ethics" and "governance & monitoring", according to the results of multiple regression analysis. 29.8% of the EIAR variance was explained by the model, indicating the possibility of additional study. The research responses showed no signs of autocorrelation or multicollinearity. The results support theories of social identification, agency, and institutionalism. It is recommended by this ground-breaking study that practitioners consider governance and ethical frameworks when designing an internal audit reporting system. Additionally, the study's limitations, implications, and future research directions are included in the study.