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Title: The relationship between internal and external auditors in Maltese listed companies : an analysis
Authors: Casha, Malcolm
Keywords: Auditing, Internal -- Malta
Auditing -- Malta
Corporations -- Malta -- Auditing
Issue Date: 2015
Abstract: Purpose: The present direction of standard setters aims towards the development of the internal-external audit relationship. This study therefore seeks to examine the auditors’ relationship by examining the communication and collaboration practices, the external auditors’ reliance process, the role of the audit committee in this relationship, and the external auditors’ perspective on internal audit outsourcing in order to determine the effect this might have on the auditors’ relationship. Design: The objectives of this study were achieved through a series of semi-structured interviews, which were conducted with the chief audit executives of listed companies, together with partners and senior managers engaged in the audit of these companies. Findings: This study establishes that the auditors’ relationship is structured around the statutory audit, and that the audit committee has an active role in this relationship. However, communication and collaboration practices are neither codified in auditing standards nor agreed upon between auditors; therefore the extent and scope varies considerably across relationships. The extent of reliance on the internal auditors’ work is rather limited due to a number of barriers. In addition, external auditors perceive that internal audit outsourcing in certain instances can improve this relationship. Conclusion: This study concludes that the auditors’ relationship is primarily knowledgedriven, since it mainly serves to supplement the external auditors’ understanding with the in-depth knowledge that internal auditors have on the organisation. Interactions between the two groups of auditors are thus intended to share information, rather than to coordinate audit work. Nevertheless, this relationship is based on mutual trust and respect; therefore it has the prospect to progress over time. Value: This study aims to provide insights to both internal and external auditors on the perspectives they have of each other in the context of this relationship. This should enable them to identify common weak spots, and as a result mitigate such deficiencies and ameliorate their respective working relationship.
Description: M.ACCTY.
Appears in Collections:Dissertations - FacEma - 2015

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