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http://dx.doi.org/10.13106/jafeb.2020.vol7.no11.867

The Impact of Internal Audit Quality on Financial Performance of Yemeni Commercial Banks: An Empirical Investigation  

HAZAEA, Saddam A. (School of Accounting, Yunnan University of Finance and Economics)
TABASH, Mosab I. (College of Business, Al Ain University)
KHATIB, Saleh F.A. (Department of Management, Azman Hashim International Business School, Universiti Teknologi Malaysia)
ZHU, Jinyu (School of Accounting, Yunnan University of Finance and Economics)
AL-KUHALI, Ahmed A. (School of Management, Lanzhou University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.7, no.11, 2020 , pp. 867-875 More about this Journal
Abstract
Quality internal audit (IA) plays a crucial role in accountability, transparency and preserving public properties. This paper gives a brief background of the IA system in Yemen and examines its impact with regards to financial performance in Yemeni commercial banks based on five factors: (i) independence of IAs, (ii) adherence to IA standards, (iii) governance principles implementation, (iv) size of the IA, and (v) frequency of internal audits committees' meetings. The primary data for the study were collected through a questionnaire prepared for this purpose. Fifty questionnaires were distributed out of which forty-two were retrieved and valid in the analysis process. For the empirical analysis, descriptive analysis and T-test were used for verification of the research hypotheses. Results revealed that sticking to standards internal audit, internal auditors' independence and quality governance have significant impact on banks' financial performance, while the size of internal audits committees, as well as their meeting, frequently has insignificant positive impact on banks' performance. Moreover, the country results show that the use of automated internal audit in banks has an impact on improving financial performance. This article provides avenues for further studies, mainly in developing countries, including Yemen, in quality internal audit and financial performance.
Keywords
Internal Audit Effectiveness; Commercial Banks; Financial Performance; Yemen;
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Times Cited By KSCI : 8  (Citation Analysis)
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