The impact of outsourcing the internal audit function on the quality of external audit (Applied as a sample to Iraqi local governments)

Abstract

AbstractThe aim of this study was to identify the internal audit situation of the local governments in Iraq and to determine the feasibility of external contracting for the internal audit function of these governments and its impact on the quality of external audit. In order to achieve the objectives of the study, the researcher conducted field visits to the internal audit departments of four Iraqi local governments (Basra, Dhi Qar, Muthanna and Wasit). The researcher also interviewed the directors of the internal audit departments, as well as distributed 123 questionnaire forms to three categories of auditors, namely internal auditors working for local governments, And a number of external auditors working at the Office of Financial Supervision in the Center and the provinces and a number of auditors working in the offices and audit companies. The most important conclusions reached by the researcher that there is a feasibility of outsourcing external audit function, especially since the internal audit function in these governments suffer Of the many serious problems at the level of the organizational structure of the Internal Audit Department and the lack of the number of owners and weak scientific qualification and lack of independence and lack of planning, and there is a positive impact of the external outsourcing of the internal audit function in the quality of external audit of To improve the independence of the internal auditor, which in turn increases reliance on the internal audit function performed by the external supplier.