Two heads are better than one: the power of auditor collaboration amid complexity

Purpose This study examines the direct effects of Internal Auditor Empowerment (IAEm) and Internal Auditor Task Complexity (IATC) on Internal Auditor Effectiveness (IAE), as well as the moderating role of External Auditor Cooperation (EAC) in these relationships, within the context of Egyptian listed companies. Design/methodology/approach Data was collected through structured questionnaires distributed to financial managers and internal audit managers, and 246 companies participated in pairs. A total of 492 complete questionnaires were analyzed using Partial Least Squares Structural Equation Modelling (PLS-SEM). Findings The findings reveal that IAEm has a positive influence on IAE, while IATC exerts a significant adverse effect. Moreover, EAC significantly moderates both relationships: it strengthens the positive association between IAEm and IAE and attenuates the negative impact of IATC on IAE. Our additional analysis reveals that larger firms are more effective in managing the Internal Auditor Task Complexity, and the cooperation between External Auditors yields positive outcomes. Research limitations/implications These results underscore the critical importance of empowering internal auditors, effectively managing task complexity, and fostering collaborative relationships with external auditors to enhance audit effectiveness and efficiency. Originality/value This research contributes to the internal audit literature by providing empirical evidence on the complex interplay of empowerment, task complexity, and auditor cooperation in shaping internal audit performance, particularly in the underexplored context of Egyptian capital markets.