Internal audit structures and misappropriation of assets fraud: a framework for investigation

Darrel Lane, Zhong Liu, Yuan Wu

Abstract


The significance of strong corporate governance has received significant regulatory attention. The purpose of the study is to assess whether organizations with an internal audit function are more likely to detect and self-report fraud than those without. In research, we find that organizations with an internal audit function are more likely than those without such a function to detect and self-report fraud. Organizations that rely solely on outsourcing for their internal audit function are less likely to detect and self-report fraud than those that undertake at least part of their internal audit function themselves. The findings suggest that internal audit adds value through improving the control and monitoring environment within organizations to detect and self-report fraud.

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ISSN (Paper)2222-1697 ISSN (Online)2222-2847

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