The Moderating Powers of Internal Audit Function on the Relationship between Corporate Governance and Financial Reporting Quality of Publicly Listed Companies in Developing Countries: A Propose Framework

This study intends to propose a structural relationship between corporate governance attributes (board independence, audit committee financial expertise), internal audit function (internal auditor's competency and communication skills), and financial reporting quality of publicly listed companies in emerging economies. The pivotal roles of internal audit function (IAF) in corporate governance and financial reporting quality (FRQ) research are massively gaining momentum in the current global business context and among academic researchers. IAF is critical in increasing transparency and accountability as well as in reducing the incidence of corporate fraud and earning management under any corporate governance setting. However, despite this, research in the area of moderating relationships to explore the relationship between corporate governance (CG), FRQ, and IAF is either limited or outdated thereby creating an empirical gap that needs to be bridged or updated. The objective of this paper is to provide a comprehensive overview through systematic review of the corporate governance attributes and internal audit function literature dimensions and their effects on the FRQ of publicly listed firms in developing countries to fill the literature gap. The study will contribute to focusing on CG in developing countries and the importance of IAF, the roles of the board of directors, corporate governance regulators as well as investors. This paper extends literature on transparency and accountability in CG and it could be a cornerstone for future research to explore the relationship further in the context of FRQ.