Do family companies invest more in internal audit function (IAF) than non-family companies?

PurposeMotivated by the growing interest of governance regulators and researchers on internal audit function (IAF), this study examines the influence of family ownership on the levels of investment in IAF.Design/methodology/approachA sample of Malaysian listed companies for the period 2009 to 2016 i...

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Bibliographic Details
Published in:International journal of emerging markets 2024-10, Vol.19 (10), p.3418-3440
Main Author: Ali Al-Qadasi, Adel
Format: Article
Language:English
Subjects:
Accounting firms
Annual reports
Audit committees
Audit fees
Auditing
Audits
Companies
Corporate governance
Emerging markets
Family owned businesses
Financial reporting
GDP
Global economy
Governance
Gross Domestic Product
Investments
Ownership
Panel data
Stockholders
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Summary:PurposeMotivated by the growing interest of governance regulators and researchers on internal audit function (IAF), this study examines the influence of family ownership on the levels of investment in IAF.Design/methodology/approachA sample of Malaysian listed companies for the period 2009 to 2016 is used. To test our hypothesis, the authors use pooled panel data regression based on two-way cluster-robust standard errors (firm and year).FindingsThe findings show that family ownership is negatively related to investment in IAF; in particular, investment in IAF is lower for family companies than non-family companies.Originality/valueThis study contributes to existing knowledge of IAF, and it provides significant insights for regulators and managers into the variation in governance structures between family and non-family companies, particularly in emerging markets in which substantial family ownership is common.
ISSN:1746-8809
1746-8817
DOI:10.1108/IJOEM-10-2021-1565