The relationship between audit committees, external auditors, and internal control systems: A literature review and a research agenda.

Publikation: Beiträge in ZeitschriftenÜbersichtsarbeitenForschung

Authors

Purpose: This paper aims to focus on the relationship between audit committees, external auditors and internal control systems (ICS) and strives to point out mutual influences between the instances to provide an integrated perspective for firms’ multilateral monitoring mechanisms. Furthermore, this study emphasizes the incorporation of sustainability and fraud considerations into the traditional roles of audit committees and auditors. Design/methodology/approach: This structured literature review is based on 71 empirical-quantitative studies published in high-quality journals between 2005 and 2022. Considering the classification of ICS into ICS quality and internal audit function, the studies are analyzed with regard to audit committees’ and external auditors’ characteristics, divided into incentives and competencies, as well as their mutual relationships. Findings: This study highlights a dynamic trilateral network of relationships between monitoring authorities and primarily shows that audit committees equipped with adequate competencies generate a substitutive effect for external auditors by reducing their efforts, whereas ICS quality serves as a possible mediator in this network of relationships. The establishment of an integrative three-party coalition of competent and adequately incentivized monitoring parties is essential to guarantee sufficient and appropriate ICS and overall corporate governance quality. Practical implications: The findings should prompt legislators and firms to ensure a deeper collaboration between audit committees, internal auditors and external auditors to generate synergy effects and economies of scale within the integrative monitoring process. Legislators should develop stricter requirements for competencies of audit committees and auditors. These should include a holistic triad of sustainability, fraud and digital expertise as well as mandatory forensic procedures performed by all monitoring bodies. Originality/value: The authors contribute to prior research by highlighting the importance of an integrative three-party coalition of monitoring authorities to ensure corporate governance quality and to generate synergy effects within a dynamic multilateral monitoring process. Furthermore, the authors offer cutting-edge implications by stressing the need for consideration of sustainability and fraud aspects in the traditional work and profiles of audit committees and auditors.

OriginalspracheEnglisch
ZeitschriftJournal of Financial Reporting and Accounting
Anzahl der Seiten22
ISSN1985-2517
DOIs
PublikationsstatusElektronische Veröffentlichung vor Drucklegung - 31.10.2024

Bibliographische Notiz

Publisher Copyright:
© 2024, Christoph Wehrhahn and Patrick Velte.

DOI

Zuletzt angesehen

Publikationen

  1. Introduction: The representative turn in EU Studies
  2. How do controls and trust interact?
  3. Backward Extended Kalman Filter to Estimate and Adaptively Control a PMSM in Saturation Conditions
  4. Anonymized Firm Data under Test: Evidence from a Replication Study
  5. On Software, or the Persistence of Visual Knowledge.
  6. The use of pseudo-causal narratives in EU policies
  7. Do abundance distributions and species aggregation correctly predict macroecological biodiversity patterns in tropical forests?
  8. Two Mediterranean annuals feature high within-population trait variability and respond differently to a precipitation gradient
  9. Authority and Authorship
  10. Simulation of SARS-CoV-2 pandemic in Germany with ordinary differential equations in MATLAB
  11. § 22 Level Playing Field and Sustainable Development
  12. Part based decentralized information handling for process improvements along the supply chain
  13. Introduction
  14. Interlanguage pragmatics: From use to acquisition to second language pedagogy
  15. Self-guided internet-based and mobile-based stress management for employees
  16. Quantifying circular economy pathways of decommissioned onshore wind turbines: The case of Denmark and Germany
  17. Temporary organizing and acceleration
  18. The Sustainability Balanced Scorecard as a Framework for Eco-Efficiency Analysis
  19. Curatorial Practices of the ‘Global’
  20. Scotland
  21. Employing complementary multivariate methods for a designed nontarget LC-HRMS screening of a wastewater-influenced river
  22. Income inequality, status decline and support for the radical right
  23. Reflections from five associate editors on their role in the journal and on its future directions
  24. Der dunkle Transhumanismus
  25. Consumer Online Search Behavior
  26. Local perceptions as a guide for the sustainable management of natural resources
  27. Effect of heat treatment on the microstructure and creep behavior of Mg-Sn-Ca alloys
  28. Process window and mechanical properties for thin magnesium- and zinc-wires in dieless wire drawing
  29. Organizational identity and firm growth
  30. Purpurne Zeichen
  31. Rosa
  32. Correlates of naturalization and occupancy of introduced ornamentals in Germany
  33. Filming Futures
  34. Die qualitative Analyse internetbasierter Daten
  35. "i like reggae and Bob Marley is already dead"
  36. The impact of foreign takeovers: comparative evidence from foreign and domestic acquisitions in Germany
  37. L’approche néo-institutionelle et ses implications pour le management des relations avec les stakeholders en phase start-up
  38. The Theory and Processes of Citizen Entrepreneurship
  39. The Predictive Power of Social Media Sentiment for Short-Term Stock Movements
  40. Die Kontingenz des Gegebenen
  41. "You Are The Only Person In This Conference"