Factors affecting the internal audit effectiveness: Empirical evidence from Nha Trang City

Abstract

Following the financial crisis and global recession, managers evaluated models and recognized the growing importance of risk and internal audits. In recent years, especially in Western countries, internal audit (IA) has become increasingly crucial. It serves management needs, acting as an "independent observer" to protect organizational value and ensure legal compliance. IA also helps identify management system flaws and improves risk management. Additionally, enhancing internal audit effectiveness (IAE) proactively boosts enterprise performance, with employee surveys being an effective tool for developing audit procedures and increasing enterprise value. This research aims to: 1. Identify the key factors influencing the IAE. 2. Analyze the impact of each key factor on the IAE. 3. Assess the current state of IA in enterprises in Nha Trang City. 4. Propose solutions to enhance the IAE operations in enterprises in Nha Trang City. This research employs statistical methods, synthesis, analysis, and discussion to research "Factors affecting the internal audit effectiveness in enterprises in Nha Trang." The author uses a quantitative research method supported by SPSS software to produce research results. The survey sample consists of 169 accounting and auditing staff members at enterprises in Nha Trang, selected to test the research hypotheses. Qualitative research results form the basis for quantitative research. The scales of dependent and independent variables used in the research model are: (1) Effectiveness of internal audit in enterprises in Nha Trang City, (2) Competency of internal auditors,(3) Senior management support, (4) Independence of internal auditors, (5) Cooperation between external and internal auditors, (6) External rewards. Drawing from the findings, the authors discussed and found evidence to clarify the research questions. The results highlighted the role of establishing an effective IC system within the IA function serves as a crucial catalyst for improving IAE. Despite some limitations, this research has enhanced understanding of the nature of IA in enterprises in Nha Trang City and the factors influencing its effectiveness in this region. It also paves the way for future research.