Protecting existing and prospective investors and the role of internal auditors

Abstract

In this study, we tried to explore the idea of the independence of the internal audit committee, the independence of the finance and accounting departments, and the corporate charter followed by the board of directors of an organization, and how they protect existing and prospective investors. A multiple regression analysis and analysis of covariance (ANCOVA) 2X2 have been used to analyze the data. A strong and positive relation has been found in this study with a highly correlated independent variable. It has been also found that 62% of the investors believed that internal auditors and finance and accounting executives are not independent at their work place. Surprisingly 89% felt that if internal audit committee and executives of finance and accounting departments work independently and effectively, then investors will be highly protected.