n131892SE Academic Article uri icon

abstract

  • Accounting regulation is one aspect of the government's role in protecting the investing public's interest. The Sarbanes-Oxley Act of 2002 (SOX) was an effort by the US Congress to remedy negative effects of earlier major accounting failures. Requirements of SOX highlight the critical role of internal control as a component of accurate and reliable financial reporting. This new emphasis on effective internal controls places internal auditors of public companies at centre stage. Internal audit departments are asked to identify, evaluate, and test the effectiveness of internal controls over financial reporting. This study examines the perceived role of the internal audit function in the external audit and financial reporting process. Results indicate that internal audit participation in the external audit process is perceived to be important by both internal and external auditors. Internal auditors are performing more work for the external auditors after the passage of SOX. Thus, implicitly, external auditors are placing greater reliance on the work of internal auditors. Copyright 2010 Inderscience Enterprises Ltd.

published proceedings

  • International Journal of Accounting, Auditing and Performance Evaluation

author list (cited authors)

  • Smith, L. M., Drake, M. S., & Shaub, M. K.

publication date

  • January 1, 2010 11:11 AM