Internal Audit Effectiveness as a Mediating Mechanism between Chief Audit Executive Characteristics and Internal Control Quality

Purpose - This study examines whether Chief Audit Executive characteristics, namely gender, knowledge, experience, and training, influence internal audit effectiveness and whether internal audit effectiveness affects internal control quality among publicly listed companies in Malaysia. In addition, the study investigates the mediating role of internal audit effectiveness in the relationship between Chief Audit Executive characteristics and internal control quality. Design/methodology/approach – This study adopts a quantitative research design using primary data collected through an online survey administered to publicly listed companies in Malaysia. The unit of analysis is at the organisational level, with a total of 272 usable responses obtained for analysis. Data are analysed using the Statistical Package for the Social Sciences and Smart Partial Least Squares. Findings – The findings indicate that Chief Audit Executive knowledge, experience, and training have a significant positive effect on internal audit effectiveness, while gender is not found to be a significant determinant. Internal audit effectiveness is shown to have a strong positive relationship with internal control quality. Furthermore, the results reveal that internal audit effectiveness significantly mediates the relationship between Chief Audit Executive knowledge and experience and internal control quality. Practical Implications- The findings provide useful insights for regulators, professional bodies, and corporate boards, including the Institute of Internal Auditors, Bursa Malaysia, and the Securities Commission, in developing policies, guidelines, and competency frameworks aimed at strengthening internal audit functions and enhancing internal control quality in publicly listed companies. Originality/value – This study contributes to the internal audit and corporate governance literature by providing empirical evidence on the mediating role of internal audit effectiveness in the relationship between Chief Audit Executive characteristics and internal control quality within an emerging market context.