Resumo

AL-DHAMARI, Redhwan; ALMAGDOUB, Almahdi  e  AL-GAMRH, Bakr. Are audit committee characteristics important to the internal audit budget in Malaysian firms?. Contad. Adm [online]. 2018, vol.63, n.spe2, pp.947-969. ISSN 0186-1042.  https://doi.org/10.22201/fca.24488410e.2018.1480.

An audit committee is viewed as an essential self-regulatory internal governance instrument that is expected to provide an oversight role over the entire process of financial reporting. An internal audit is also one of the corporate governance cornerstones that is essential for the effective monitoring of the operating performance of internal control. To ensure its effectiveness, the audit committee monitors the resources available to the internal audit, and internal control functions should be directly reported to the audit committee. This study analyses the effect of audit committee characteristics on internal audit budget in Malaysia, where data on internal audit budget is available and how well audit committee monitors the internal audit function is questionable. Our study also opens the door to an unanswered question, that is, whether an audit committee index is related to internal audit budget. Data of 96 companies listed on Bursa Malaysia for a three-year period, 2012-2014, was utilized to achieve this end. The regression results show that audit committee meeting and index are significantly and positively associated with internal audit budget. They also indicate that audit committee tenure has a significant and negative impact on internal audit budget. The findings of the study support the recent policy initiatives in relation to audit committee and internal audit. They also serve as a wake-up call to policy makers in requiring more committed and skilled members on the audit committee.

Palavras-chave : M42; M41; G30; G39; Audit Committee Characteristics; Internal Audit Budget; Internal Audit Function; Malaysia.

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