The current study has three main objectives: (1) to investigate the joint impact of internal audit function (IAF) independence factors and competence on the coordination between IAF and external auditor (EA); (2) to examine the effect of coordination on audit report lag; (3) to investigate the joint impact of IAF independence factors and competence on audit report lag. To the best of the researchers’ knowledge there is no previous study shed the light on the interactive impact of IAF quality determinants on coordination and on audit delay. In addition, this study is the first that examines the mediating effect of coordination on the associations between the interactive IAF quality determinants and audit report lag. This paper is conducted based on a sample of Lebanese banks operating in Lebanon, focusing on the three-year period from 2016 to 2018. The researchers adopt the Partial Least Square (PLS) 3 for analyzing data and testing the posited hypotheses. The results show that the first and second interactions between IAF independence factors and competence have respectively moderate and weak positive effect on coordination. The outcomes also show that the first and second interactions have respectively weak and moderate negative effect on audit report lag. However, both coordination and bank size (control variable) have no effect on audit report lag. The results also reveal that there is no mediating effect of coordination on the associations between each of interaction (1) and (2) and audit report lag. This study has some limitations that can be used as base for further future research. For example, the current paper is conducted on a small sample size that may limit the power of this research to generalize its findings. The results of this study provide significant insights to the board of directors, audit committees (ACs), IAFs, managements, and EAs of the Lebanese banking sector, and the governmental and regulatory bodies of the banking sector.
|Number of pages||34|
|Journal||BAU Journal- Creative Sustainable Development|
|Publication status||Published - 30 Nov 2020|