Internal Auditors’ Characteristics and Audit Fees: Evidence from Egyptian Firms

  • Abbass D
  • Aleqab M
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Abstract

Reliance of external auditors on the work of internal auditors is very important but yet, complex decision tasks that require professional judgment as it is influenced by a number of factors, characteristics of internal auditors are of the most important factors to be considered. The paper obtains various criteria relating to the evaluation of internal audit organizational status, work performed, competence, and professional due care as stipulated in Professional Auditing Standards including the Egyptian Auditing Standard (EAS)No.610 “Using the work of internal auditors”. This study revealed that internal auditors’ characteristics assist in increasing external auditors’ reliance on their works and so minimize external auditors’ efforts and so fees. Data on internal audit characteristics are obtained from survey respondents of Egyptian companies and audit fee data are obtained from their annual reports. Results indicate that lower external audit fees are associated with top management support for internal auditors, not imposing constraints on internal auditors works, is ready to act upon internal audit staff findings and recommendations, adequacy of education of internal auditors, good practices for hiring and training internal auditors. Also, lower external audit fees are associated with adequacy of working paper documentation supporting internal auditors’ conclusions, sufficiency of internal auditors’ evidences.

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APA

Abbass, D. A., & Aleqab, M. M. (2013). Internal Auditors’ Characteristics and Audit Fees: Evidence from Egyptian Firms. International Business Research, 6(4). https://doi.org/10.5539/ibr.v6n4p67

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