The Effect of Six Sigma Standards on the Quality of Financial Statements through Internal Auditing as a Mediating Variable (A field Study on commercial banks in city of Sana’a)

  Abstract Previous studies have highlighted the importance of Six Sigma standards in enhancing the efficiency of internal auditing, alongside the role of internal auditing in improving the quality of financial reports. However, the impact of Six Sigma standards on the quality of financial reports still requires further research and analysis. Given the role of Six Sigma in reducing errors, the researcher hypothesized the existence of an indirect relationship between Six Sigma standards and the quality of financial reports. This study aims to analyze the impact of Six Sigma standards on the quality of financial statements through internal auditing as a mediating variable. The researcher adopted a descriptive-analytical approach and employed path analysis to study the relationships among the research variables. Data were collected using a questionnaire directed at the study population, which included financial accounting and internal auditing employees in commercial banks in the capital city of Sana'a. A total of 65 questionnaires were distributed to the target population, of which 52 valid responses were retrieved, achieving a response rate of approximately 80%. The study's findings revealed a statistically significant direct relationship between the application of Six Sigma standards and the effectiveness of internal auditing. Additionally, internal auditing significantly contributes to improving the quality of financial reports. The findings also indicated an indirect impact of Six Sigma standards on the quality of financial reports through internal auditing as a mediating variable. These results underscore the role of Six Sigma and internal auditing as effective control tools that enhance the quality of financial reports by improving the performance of internal audit departments in banks. The study offered several recommendations, most notably the need to strengthen the application of Six Sigma standards in internal auditing processes due to their indirect role in improving the quality of financial reports. It also encouraged banks to adopt Six Sigma standards as part of their quality policies. Keywords: Six Sigma, internal auditing, financial report quality