الفهرس 
Chapter 1: IntroductionOnly 14 pages are availabe for public view
Abstract
Purpose – The purpose of this research is to test the impact of the internal audit
function (IAF), an increasingly common internal governance mechanism, on
firm’s fraudulent financial reporting practices. Specifically, this research
investigates the relationship between the quality of the IAF and abnormal
accruals (as a proxy of fraud risk in financial reports) and whether the audit
committee and the board of directors play a role in enhancing this relationship.
Design/methodology/approach – This research uses data from financial reports
and survey responses. Regression analysis was used to test the hypotheses.
Findings – The research findings show an expected negative/inverse relationship
between internal audit quality and abnormal accruals, this research shows that
the association between internal audit quality and abnormal accruals is negative
and in particular “Risk-based audit plans”, “Engagement Planning and
Performance of Audit Work” and “Reporting by IA Department” are negatively
and significantly associated with abnormal accruals.
Next, when this research investigates whether audit committee quality affects the
relationship between internal audit quality and abnormal accruals, the results
suggest that internal audit quality and audit committee quality when incorporated
that leads to lower level of fraudulent financial reporting and a better effect in
facing fraud risks. Also, when this research investigates whether board quality
affects the relationship between internal audit quality and abnormal accruals,
the results suggest that internal audit quality and board of directors’ quality when
incorporated that leads to lower levels of fraudulent financial reporting. The
researcher can conclude that, if firms already have other strong internal
governance mechanisms as strong boards and strong audit committee, then
having equally strong internal audit function will probably be more valuable in
mitigating fraud risk in financial reporting.
Research limitations/implications – The findings show that certain internal audit
attributes play an important role in the financial reporting process and thus these
findings are expected to inform regulatory bodies on the role of internal audit
(being an important internal governance mechanism) in mitigating fraudulent
financial reporting practices, which in turn can assist in market/regulatory
reforms and inform the revised Egyptian Code of Corporate Governance.
Originality/value – This paper extends prior internal auditing literature by
examining the relationship between internal audit quality and fraudulent
financial reporting in the context of a developing country, namely Egypt, and
whether the audit committee and the board of directors moderate the examined
association.