Informal interactions between audit committees and internal audit function. Evidence from Greek listed firms

Abstract

During the last decade, corporate irregularities created an unstable economic environment, which highlighted the importance of internal audit function (IAF) and audit committee (AC) in the context of corporate governance worldwide. However, a small number of researches have dealt with informal interactions between the audit committee and the internal audit function in Greek entities. In this context, this article investigates, on the one hand, the existence of informal interactions between the audit committee and the internal audit function, whereas on the other hand, it emphasizes on the determination of the factors associated with their existence. In particular, an empirical survey was conducted with the distribution of a questionnaire to Greek entities listed on the Athens Stock Exchange and a logistic regression analysis was used to illustrate the information gathered. This study indicates the existence and the factors influencing informal interactions between the audit committee and internal audit function in Greece. More particularly AC independence, AC chair characteristics and CAE characteristics (independent and objective) were found statistically significantly associated with the informal interaction between the two functions.