Determinants of Internal Audit Quality Post Sarbanes Oxley Act of 2002

In this study we utilize responses from 386 chief audit executives (CAEs) of public companies located in Anglo-culture countries, to identify and test the determinants of internal audit quality (IAQ). We then use external quality assessment and improvement programs as an objective dependent variable in a regression where test variables are (1) internal quality assessment and improvement programs, (2) determinants of internal audit quality, (3) measures of internal audit performance, (4) audit committee involvement, and (5) internal audit function age. We test multiple other variables as control variables, including the six variables that U.S. and international standards have identified for the external auditors to consider when deciding on whether to rely on the work of internal auditors. We find strong statistical support for our five test variables, but not control variables, where only one of the SAS 65/128/IAS 610 determinants of IAQ, CIA certification of the CAE, is positively associated with our dependent variable, and only marginally.