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Internal audit outsourcing in Australia

Carey, Peter, Subramaniam, Nava and Chua, Karin Wee Ching 2006, Internal audit outsourcing in Australia, Accounting and finance : journal of the Accounting Association of Australia and New Zealand, vol. 46, no. 1, pp. 11-30.

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Title Internal audit outsourcing in Australia
Author(s) Carey, Peter
Subramaniam, Nava
Chua, Karin Wee Ching
Journal name Accounting and finance : journal of the Accounting Association of Australia and New Zealand
Volume number 46
Issue number 1
Start page 11
End page 30
Publisher Accounting Association of Australia and New Zealand
Place of publication Clayton, Vic.
Publication date 2006-03
ISSN 1467-629X
0810-5391
Keyword(s) assurance services
internal audit
outsourcing
Summary The present study investigates the determinants of internal audit outsourcing using survey data on 99 companies listed on the Australian Stock Exchange, where 54.5 per cent fully rely on in-house facilities and 45.5 per cent outsource some or all of their internal audit function. Results from logistic regression analyses suggest that internal audit outsourcing is associated with perceived cost savings and the technical competence of the external provider. For a subsample of firms that have previously undertaken internal audit activities before outsourcing, contrary to expectations, the larger the organization the greater the propensity to outsource. In addition, smaller firms are found to be adopting internal audit for the first time, through outsourcing. These results suggest that internal audit outsourcing is an expanding business opportunity for professional accountants; but with 75 per cent of firms outsourcing to their external auditor, there are implications for external auditor independence.
Language eng
Field of Research 150102 Auditing and Accountability
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©2006, The Authors
Persistent URL http://hdl.handle.net/10536/DRO/DU:30018581

Document type: Journal Article
Collection: School of Accounting, Economics and Finance
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Created: Wed, 09 Sep 2009, 09:07:23 EST by Rachael Mackenzie