Internal Audit Effectiveness in Insurance and Takaful Companies in Malaysia: A Study of Internal Auditors and Auditees’ Perceptions

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Noor Adwa Sulaiman
Nadratun Na’im Kamarudin
Suhaily Shahimi


Manuscript type: Research paper
Purpose: This study examines the views of internal auditors and auditees on factors affecting internal audit effectiveness (IAE) in insurance and takaful companies in Malaysia.
Design/Methodology/Approach: A total of 240 respondents participated in a self-administered survey questionnaire.
Findings: Multiple regression analyses suggests independence as well as the resources of internal audit functions (IAF) and relationship with the audit committee is perceived to affect IAE. However, management support is perceived to be less significant in affecting IAE. Furthermore, independent t-test and eta squared analyses show that respondents perceive the factors that significantly affect IAE differently, with independent internal audits scoring the highest.
Research limitations/Implications: The respondents were only limited to internal auditors and auditees in insurance and takaful companies. Practical implications: Such empirical evidence is expected to be used by companies, regulators as well as researchers in understanding the prevailing factors affecting IAE in insurance and takaful companies. Originality/Value: The value of this study is grounded on limited studies of IAE in the financial industry, specifically insurance and takaful companies, and the analysis of both auditors and auditees’ views on the principal factors affecting IAE. 


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