The Determinants of Internal Auditing Effectiveness in the Public Sector: Saudi Universities

Abstract

This paper aims to examine the determinants of the effectiveness of internal auditing (IA) in the Saudi public sector. Although there have been efforts to study the statutes of IA in the Saudi public sector and the influences on IA effectiveness, there are still research gaps related to the measurement of IA effectiveness, the determinants of its variations, and to the context of Saudi public universities. The multiple regression analysis reveals that the effectiveness of IA – measured by a new index that reflects the extent of compliance with the Saudi internal auditing regulation - is positively related to top management support, to using the employment within IA departments as a training and preparation ground for employees and leaders, and to the number of IA department heads since its creation. Furthermore, IA effectiveness is negatively related to the extent of the outsourcing of the IA activity. These findings point to the importance of such factors in the development and improvement of IA in the Saudi public sector. To this end, several recommendations are provided. This study adds to the literature on IA, risk management, governance, management accounting systems and internal controls