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Questions exist regarding the extent to which internal auditors should participate in the external audit, and wide variations are observed in practice. Many professional bodies increasingly advocate the view that increased coordination between the internal and external auditors, including increased use of the internal auditor for the external audit, provides more efficient and effective audit coverage. However, others maintain that internal auditors should not focus on areas that are the subject of external audit interest. This article attempts to shed light on this debate by using insights from transaction cost economics (TCE) to identify conditions under which organizations encourage internal audit participation in the external audit. An analysis of survey data collected from directors of Canadian internal audit departments indicate that some (TCE) variables, particularly transaction‐specific investment, are significantly associated with internal audit participation in the external audit.

The study aims to determine whether audited organizations experience differences between external audits and official controls.

A survey among 100 organic food producers was conducted to explore differences regarding the usability of external audits and official controls. The survey was conducted in 2020 using the computer-assisted telephone interview (CATI) method supplemented by the computer-assisted web interview (CAWI) method. Organizations processing organic farming products in Poland were chosen for the study.

Three primary benefits associated with external audits and official controls were identified, i.e. (1) enabling and initiating activities related to the improvement of the organization, (2) improving the financial performance of the organization and (3) enhancing credibility. For most organizations, the assessment of these features was at the same level for both external audits and official control. However, if these assessments differed, commercial audits were assessed at a higher level than official controls.

The study is limited to only one specific type of manufacturing organization and one European country.

The literature review shows some conceptual differences between audits and official controls, but the results of this study show that the business environment does not perceive these differences as significant. Thus, the value of the study is reflected in the conclusion that both external audits and official controls are considered useful and credible approaches to monitoring the quality within the organization, which allows us to state that external evaluation is generally seen as an opportunity to improve the performance of the organization.

The purpose of this paper is to advance knowledge and obtain an understanding of the phenomenon of public sector external auditing (PSEA) in Tanzania.

The paper used a grounded theory method informed by a critical approach. It used data from multiple sources including interviews, observations and documents, to provide a theoretical and practical understanding of PSEA in Tanzania. The theoretical aspects were developed ‘in vivo’ and were also informed by the Habermasian concept of colonisation.

The principal research findings from the data concern the central phenomenon of managing colonising tendencies in PSEA which appeared to be the core strategy for both the government and external auditors. While the government appeared to manage the National Audit Office of Tanzania (NAOT) appearance and exploited the legitimising features of PSEA, external auditors manoeuvred within colonising tendencies and attempted to maintain the ‘audit supremacy’ image. PSEA in Tanzania encountered colonising tendencies because of weak working relationship between the NAOT and other accountability agencies, inconsistencies in governance and politics, the culture of corruption and secrecy, dependence on foreign financing and mimicking of foreign models. To coexist within this colonising environment, external auditors managed their relationship with auditees and the complexities of PSEA roles. Managing colonising tendencies resulted into obscured subordination of PSEA, contributing to cosmetic accountability and growing public interest in PSEA.

It is hoped that future research in other countries, in and beyond Africa, will be undertaken to broaden and deepen our understanding of the external auditing of public sector entities.

The paper combines grounded theory with a critical approach to understand PSEA in a developing country.

This study aims to document the effect of educated workforce on the decision of small and medium enterprises (SMEs) to use external auditors to verify their financial statements.

This paper uses the probit regression models and the data from 141 developing countries to test the arguments presented in this paper. The data is provided by the World Bank’s Enterprise Surveys and is collected during the period between 2006 and 2020.

The paper shows that SMEs with inadequate access to educated workforce are more likely to use external auditors to verify their financial statements. The findings are robust to the comprehensive inclusion of relevant controls and to a number of sensitivity tests. The sensitivity tests include dividing samples based on SME’s size, country’s gross domestic product and country’s location. The results also remain qualitatively the same after correcting for potential endogeneity concerns. Furthermore, the paper shows that the relationship between access to educated workforce and the choice of external audit is moderated by several SME-specific characteristics, such as its size, ownership concentration, managerial experience and tax-related problems.

This is an initial attempt to highlight the role played by the quality of workforce on the choice of external audit among SMEs in an international context. Most of prior literature on this topic focuses on the publicly listed firms.

The purpose of this paper is to evaluate the impact of external audit on the management of the Common Fund of the Mozambique National Institute of Statistics (INE).

This paper followed a case study approach of the INE Common Fund that was based on the qualitative evidence from the content analysis of the external audit reports, annual plans of activities and budget for the past seven years and interviews with middle managers of the INE.

The research found that external audit has a relatively significant impact on the management of the INE Common Fund. The authors attribute the positive impact to the high concern of management to implement the external audit recommendations, associated with the financial dependence between the agent (the National Institute of Statistics) and the principal (Fund Donors), explained through Laughlin’s Model of Accountability.

The results indicate that external audit associated with the financial dependence of the agent on the principal has a significant impact on the accountability. Thus, it contributes to assist in the formulation of public policies on external financing to developing countries.

Most of the studies on external audit and accountability are from countries with more developed economies than Mozambique’s, without heavy reliance on external financing, and these studies analyse the audits carried out by public audit institutions. This research explores the phenomenon in the context of external financing to the State Budget by governments and international organisations.

The purpose of this paper is to examine whether coordination between external auditors and the internal audit function affect the timeliness of audit reports as proxied by audit delay.

This study uses a survey of chief internal auditors from Tunisian listed companies to analyze the extent of coordination between IAFs and external auditors. Data spanning a four year period (2011-2014) was collected for 53 listed companies. Further, regression analysis was used to test the hypothesis.

Results indicate that greater coordination between internal and external auditors results in timelier financial reporting.

Overall, the study makes several important contributions. Findings provide important insights that an IAF acts as a valuable resource to external auditors. The results should be of interest to managers, external auditors and the Tunisian Financial Market Council.

This paper is one of few studies which have examined the association between internal-external audit coordination and timeliness of audit reports in an emerging market. The study makes a meaningful contribution to the corporate governance literature by investigating the influence of internal audit assistance on the delivery of timely audited financial information to the capital market. Results also have policy implications for Tunisian regulators with respect to the promotion of internal auditing best practices.

Carries out a study which empirically examines both internal and external auditors in New Zealand to determine the extent to which 21 audit supervisory tools were used in audit practice. In addition to determining how frequently each of the supervisory techniques was used, the study tested two hypotheses. The first hypothesis was that the statistical variance for the number of audit supervisory techniques used on internal audits is greater than that for external audits. The second hypothesis was that the average number of audit supervisory techniques used on external audits is greater than that for internal audits, suggesting that external audits are more closely supervised than are internal audits. Both hypotheses were supported by the study data. In addition, supervisory profiles were constructed for both internal and external audits. The profiles indicated that while external audits appear to use more supervisory techniques during the course of the audit due to greater liability and competitive pressure, internal audits are more likely to require closer supervision of the release of audit reports and audit follow‐up.

The purpose of this paper is to investigate the perceptions of a sample of Jordanian external auditors for the importance given by them to a number of factors which may influence their reliance on an internal auditor during their external audit. The paper also examines the relationship, if any, between the degree of reliance on the internal and external audit fees.

A sample of 100 external auditors is employed to investigate the perceptions of external auditors as to the importance given by them to a number of factors which may influence their reliance on an internal auditor during their external audit. Also, a cross‐sectional multiple regression analysis is conducted to examine the impact of this reliance on audit fees.

The results of the paper indicate that external auditors in Jordan consider the objectivity, competence and work performance of internal auditors as very important factors affecting their reliance decisions. It is found that “objectivity” had the highest mean score (4.353), followed by “competence” (4.188) and “work performance” (4.156). The results of the multiple regression analysis indicated that the size of the audited company is the most important variable in explaining the variation in audit fees paid by the sample companies. As for the reliance variable, it is found insignificant.

It is believed that no previous research has examined these issues on the basis of Jordanian data. Thus, the current paper aims to extend the literature on these topics on a developing country with different characteristics. The results of this paper will be of concern to companies in their attempt to reduce external audit fees. Audit firms may also benefit from the paper in terms of reducing the efforts of external auditors due to the understanding and cooperation between external and internal auditors.

This paper aims to explore organisational intentions to use Big Data and Big Data Analytics (BDA) in external auditing. This study conceptualises different contingent motivating factors based on prior literature and the views of auditors, business clients and regulators regarding the external auditing practices and BDA.

Using the contingency theory approach, a literature review and 21 in-depth interviews with three different types of respondents, the authors explore factors motivating the use of BDA in external auditing.

The study presents a few key findings regarding the use of BD and BDA in external auditing. By disclosing a comprehensive view of current practices, the authors identify two groups of motivating factors (company-related and institutional) and the circumstances in which to use BDA, which will lead to the desired outcomes of audit companies. In addition, the authors emphasise the relationship of audit companies, business clients and regulators. The research indicates a trend whereby external auditors are likely to focus on the procedures not only to satisfy regulatory requirements but also to provide more value for business clients; hence, BDA may be one of the solutions.

The conclusions of this study are based on interview data collected from 21 participants. There is a limited number of large companies in Lithuania that are open to co-operation. Future studies may investigate the issues addressed in this study further by using different research sites and a broader range of data.

Current practices and outcomes of using BD and BDA by different types of respondents differ significantly. The authors wish to emphasise the need for audit companies to implement a BD-driven approach and to customise their audit strategy to gain long-term efficiency. Furthermore, the most challenging factors for using BDA emerged, namely, long-term audit agreements and the business clients’ sizes, structures and information systems.

The original contribution of this study lies in the empirical investigation of the comprehensive state-of-the-art of BDA usage and motivating factors in external auditing. Moreover, the study examines the phenomenon of BD as one of the most recent and praised developments in the external auditing context. Finally, a contingency-based theoretical framework has been proposed. In addition, the research also makes a methodological contribution by using the approach of constructivist grounded theory for the analysis of qualitative data.

This study aims to examine the combined effect of audit committee existence and external audit on earnings management.

The paper uses ordinary least squares regression model to examine the effect of audit committee existence, external audit and the interaction between these two monitoring mechanisms on earnings management for a sample of 33 non-financial listed Portuguese firms-year from 2003 to 2009.

In contrast to results of most previous studies, which assume that audit committees and external auditor act independently from one another, the paper finds a positive relationship between both audit committee existence and external audit and discretionary accruals. However, this study suggests that the existence of an audit committee and external auditor jointly reduces earnings management.

The findings based on this study provide useful information for regulators in countries with an institutional environment similar to that of Portugal. In addition, the results also provide useful information to investors in evaluating the impact of audit committee existence and external audit on earnings quality, especially under concentrated ownership.

The major contribution of the current study is that in contrast to previous studies, which have implicitly assumed that audit committees and external auditors act independently from one another, this study also examines the combined effects of audit committee existence and external auditors on earnings management. In addition, this paper is the first empirical study to investigate the effect of audit committee existence and external audit on earnings management in Portugal.