THE IMPACT OF AUDIT COMMITEE ON THE EFFECTIVENESS OF INTERNAL AUDIT IN LISTED COMPANIES IN MUSCAT SECURITES MARKET

Abstract

This study is conducted to examine the impacts of audit committee (AC) on the internal audit effectiveness (IAE) in companies listed in Muscat Securities Market (MSM). A quantitative approach is employed in this study and a structural equation modelling (SEM) is used to analyze the collected data. Simple random sampling was chosen for the data collection. Survey questionnaires were disseminated to a total of 397 respondents comprising of financial/accounts managers, internal auditors, accountants, and member of audit committee. The results show that AC impacts the IAE, whereby the AC changes the positive connections between the integration (β =0.379, p<0.05), relevance (β = 0.312, p<0.05), flexibility (β =0.242, p< 0.05), and reliability (β =0.213, p< 0.05). This indicates that the reliability is the main cause that can influence the IAE. Thus, this study recommends MSM companies to emphasis on increasing the quality and the performance of IAE by improving their AC.