The impact of audit committee characteristics on the implementation of internal audit recommendations

Regulators and others highlight the importance of the interaction between the audit committee and internal audit. One of the roles of the audit committee is to review and monitor management's response to internal audit findings and recommendations. This study provides empirical evidence of the association between audit committee characteristics and perceptions of implementation of internal audit recommendations. Using data from a survey of chief internal auditors from UK-listed companies, the study finds that greater perceptions of the implementation of internal audit recommendations are strongly related to the presence of independent members of the audit committee and to those members’ expertise in accounting and auditing. The results also suggest that perceptions of implementing internal audit recommendations are influenced by frequent meetings between the audit committee and chief internal auditors.