B. Dimensión Psicosociales
2.2.2. Estudios Previos Nacionales.
This study examines the role that the internal audit function (IAF) plays in the timeliness of financial reporting by investigating whether measures of IAF quality and the IAF’s
contribution to the financial statement audit are associated with audit delay. Results indicate that
28 The coefficients from the logistic regression predicting the likelihood that IndepWork = 1 cannot be used to
calculate the indirect effects (Table 6, Model 3). Maximum likelihood estimation produces coefficients that differ from the logistic regression in Table 6, but can be used to calculate indirect effects.Coefficients from the maximum likelihood estimation (MLE) of the direct effect of IA Quality on Delay in Table 7 are identical to those in the OLS regression in Model 3 of Table 5. Standard error calculations for MLE differ slightly from those produced by OLS regression, but the differences do not materially affect significance levels.
41 firms with higher quality IAFs experience significantly shorter audit delays: a one standard deviation increase in our comprehensive measure of IAF quality is associated with a 3.1-to-3.9- dayreduction in audit delay, depending on sample period. The negative relation between IAF quality and audit delay is primarily driven by the competence of internal audit staff and the quality of their fieldwork. IAF investment and objectivity are also negatively associated with audit delay, but significance levels are sensitive to sample period. Contrary to predictions, the degree to which the IAF audits financial activities is not significantly associated with delay. Audit delay is also significantly shorter (4.7 to 8.2 days, depending on sample period)when the external auditor uses IAF work to complete the audit. This reduction is largely attributable to independently performed IAF work, and not direct assistance. The magnitudes of the
aforementioned reductions in audit delay are economically significant, given that accelerated filers released earnings an average of 7.4 days prior to the audit completion date during our sample period.
This study also provides evidence on the determinants of internal audit contribution. IAF quality is significantly and positively (negatively) associated with contribution when it takes the form of independently performed audit work (direct assistance). This suggests that higher quality internal auditors can independently perform work for use in the financial statement audit, while lower quality internal auditors can only assist in the audit when closely supervised by the external auditor. Audit committee effectiveness, is positively and significantly associated with both methods of contribution, consistent with the expectation that effective audit committees lower control risk. As predicted, the likelihood that external auditor use is increasing
(decreasing) in our proxies for internal (external) auditor availability, suggesting that resource availability affects the contribution decision.
42 As the first study to provide empirical evidence that both IAF quality and the IAF’s contribution to the financial statement audit affect audit delay, this research makes several contributions to the literature. In particular, we extend studies that investigate determinants of audit delay, and thereby identify factors associated with the timeliness, and potentially the quality, of accounting information. The use of audit delay to measure audit effort compliments prior studies that use audit fees and hours to investigate the relation between IAF contribution and audit effort (Stein et al. 1994; Felix et al. 2001 and Prawitt et al. 2011). The results suggest that the nature of the IAF’s contribution to the financial statement audit (independent work versus direct) is an important factor in understanding how IAF contribution influences the financial statement audit and in external auditors’ decisions to use the work of the IAF. Finally, this research builds upon prior work that uses the GAIN database to further our understanding of the IAF’s role throughout the financial reporting process (Prawitt et al. 2009, Lin et al. 2011, Prawitt et al. 2011).
The findings have important implications for managers and audit committee directors who structure the IAF, and for both managers/directors and external auditors who together determine the extent of the IAF’s contribution to the financial statement audit. The results show mixed support for recent PCAOB guidance contending that external auditors can improve audit efficiency by making more extensive use of work performed by others, and thus indicate a need for more research that investigates the nature of the IAF’s contribution (PCAOB 2005, 2007a, 2007b). In particular, studies could better distinguish between the different methods by which internal audit work contributes to the completion of the financial statement audit. Finally, this research should be of interest to regulators who set reporting deadlines.
43 This study is subject to several limitations. Most notably, the small size and homogeneity of our sample, combined with the large number of control variables, lowers the power of our statistical tests. In particular, models predicting IAF contribution have low explanatory power. Furthermore, large firms with relatively sophisticated IAFs and relatively little variation in audit delay tend to participate in the GAIN survey. While this limits our ability to generalize findings to firms that did not respond to the GAIN survey, we expect that the material negative relations between audit delay and both IA quality and contribution found in the current sample would be even larger in a more heterogeneous sample. Relatedly, few IAFs in the sample only contribute to the financial statement audit by providing direct assistance to the external auditor; therefore, it is difficult to isolate the effects of direct assistance from those of independently performed work. Another concern with this study is the pre-SOX 404 sample period, which was a time of
significant change for both internal and external auditors. However, given that the analyses produced significant results even during this transitional period, we expect the results would be even stronger for a more stable period. Additionally, the rigorous attestation requirements of SOX 404 expanded the IAF’s potential to contribute to the financial reporting process (Gramling et al. 2004 p. 196), and therefore, if anything, should increase the impact of IAF quality and contribution on audit delay in the post-SOX 404 period. Finally, it is possible that our results are confounded by endogeneity. While it is difficult to completely eliminate this concern, inclusion of controls for accounting system reliability and governance practices and results from a two- stage-lease-squares regression indicate that endogeneity is not likely to be a significant problem. Despite these limitations, this study provides new evidence on the IAF’s role in the financial statement audit and identifies areas for future research.
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49 Appendix A
Descriptive Statistics for Survey Items Used to Construct Competence, Fieldwork Qual, and
Financial Focus
Survey items used to construct Competence
Mean Median Std. Dev. Min. Max.
Experience 8.69 8.00 4.03 0.00 24.00
Education 4.49 4.50 0.46 3.00 6.00
Certification 0.58 0.59 0.26 0.00 1.00
Training 56.06 50.00 27.87 0.00 178.00
Experience: Average number of years of auditing experience (internal and external) of the audit staff (B6a and B6b).
Education: Average of the number of years of undergraduate and graduate education of the audit staff, based on highest degree achieved. Associate, Bachelor, Master, and Ph.D. degrees are assumed to take 2, 4, 6, and 8 years of study, respectively (B5).
Certifications: Percentage of professional staff members with one or more audit certifications (B8). Training: Annual hours of training per internal auditor (B15b).
Survey items used to construct Fieldwork Qual
Quality assurance Mean Median Std. Dev. Min. Max.
Direct Supervision 1.76 2.00 0.49 0.00 2.00
Working paper review 1.48 2.00 0.72 0.00 2.00
Audit client feedback 1.65 2.00 0.63 0.00 2.00
Peer review 0.99 1.00 0.77 0.00 2.00
Follow Up 1.64 2.00 0.77 0.00 2.00
Grading 0.94 0.00 1.00 0.00 2.00
Quality assurance: How frequently do you employ the following quality assurance techniques during fieldwork? (Regularly = 2, Occasionally = 1, Never = 0)
Follow Up: Do you formally follow-up to test corrective action? (Yes = 2, No = 0)
Grading: Does the final audit report include a “grade” or “score” as determined by the results of the audit? (Yes/Generally yes, but moving away from this practice = 2; No/generally no, but starting to
implement this practice = 0)
Survey items used to construct Financial Focus
How frequently were the following types of activities audited? (Regularly = 2, Occas. = 1, Never = 0)
Mean Median Std. Dev. Min. Max.
Adequacy of internal accounting controls 1.88 2.00 0.36 0.00 2.00
Accuracy, reliability & completeness of financial
records 1.60 2.00 0.55 0.00 2.00
Impact of changes in accting. Rules or
regulations 0.80 1.00 0.68 0.00 2.00
Interim quarterly financial results reported
externally 0.52 0.00 0.75 0.00 2.00
50 Appendix B
Coding of IAF Contribution Measures
Cross tabulation of DirectAssist and IndepWork IndepWork
Perform complete or partial audits of specific Locations, Products, or Functions. No Yes Total DirectAssist Loan staff to External Auditors No 101 107 208 Yes 23 62 85 Total 124 169 293 Yes (N = 267) No (N = 26) IA Coordinate = 0
IF your answer was yes, then what means were used? (check all that apply) 1) Loan staff to External Auditors (N = 83)
2) Perform complete or partial audits of specific Locations, Products, or
Functions (N = 165)
3) Conduct joint annual Planning sessions (N = 183)
4) Conduct joint Risk or Control Sessions (N = 117)
Did you coordinate your audit services with the external auditors?
3) and/or 4) ONLY (N = 75) IA Coordinate = 0
1) and/or 2) (N = 192) IA Coordinate = 1