Effect of Internal Audit Excellence Capability on Firm Goal Achievement of Hotel Businesses in Thailand
Keywords:
Internal audit excellence capability, Business value, Stakeholder reliability, Firm goal achievementAbstract
This research aims to explore the effects of internal audit excellence capability on firm goal achievement. The model was empirically tested by using the collected data of mail surveys from hotel businesses in Thailand. Internal auditors or the chief directors of the internal audit managers are the key informants. There were 290 returned questionnaires that were used in this analysis. The Ordinary Least Squares (OLS) regression was the method used for testing the hypotheses. The results revealed that each dimension of internal audit excellence capability has positively influenced its consequences which are business value, stakeholder reliability and firm goal achievement. Finally, contributions and suggestions are also provided for further research.
References
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Archambeault, D. & Holt, T.P. (2008). The need for an internal auditor report to external stakeholders to
improve governance transparency. American Accounting Association. 22(4), 375-388.
Asare, S. K., Davidson, R. A., & Gramling, A. A. (2008). Internal auditors’ evaluation of fraud factors in
planning and audit: the importance of audit committee quality and management incentives.
International Journal of Auditing. 12(3), 181-203.
Bernardo, M. C., Marti, K., & Stanislav, H. I. (2010). An empirical study on the integration of management
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Beyer, A. & Sridhar, S. S. (2006). Effects of multiple clients on the reliability of audit reports. Journal of
Accounting Research. 44(1).
Bierstaker, L. J. & Arnold, W. (2004). Does the adoption of a business risk audit approach change
internal control documentation and testing practices? International Journal of Auditing. 8(1), 67.
Carlo, G. & Randall, B.A. (2002).The development of a measure of prosocial behaviors for late
adolescents faculty publication, Department of Psychology. Journal of Youth and Adolescence.
31(1), 31–44.
Chen, Y.-J., Chen, Y.-M., & Chu, H.-C. (2009). Development of a mechanism for ontology-based product
lifecycle knowledge integration. Expert Systems with Applications. 36, 2759-2779.
Cohen, J., Krishnamoorthy, G., & Wright, A. (2008). Waste is our business, Inc.: The importance of non-
financial information in the audit planning process. Journal of Accounting Education. 26 (3), 166-
178.
Cooper, B.J., Leung, P., & Wong, G. (2006). The Asia pacific literature review on internal auditing.
Managerial Auditing Journal. 21(8), 822-834.
DeBoskey, D. G. & Gillett, P. R. (2013). The impact of multi-dimensional corporate transparency on us
firms’ credit ratings and cost of capital. Review of Quantitative Finance and Accounting. 40(1),
101-134.
Enberg, C. E. (2012). Knowledge integration in coopetitive R&D projects –The management of conflicting
logics. International journal of Project Management. 30, 771-780.
Fadzil. H.F., Haron, H., & Jantan, M. (2005). Internal auditing practices and internal control system.
Managerial Auditing Journal. 20(8), 844-866.
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Auditing Journal. 21(1), 81-101.
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directions for future research. Journal of Accounting Literature. 23, 194-244.
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Lin, S., Pizzini, M., Vargus, M., & Bardhan, I.R. (2011). The role of the internal audit function in the
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IP Litigator. 39-41.
McCoy, N., Burnett, R., Friedman, M., & Morris, M. (2011). Internal audit: How to develop professional
skepticism. The Journal of Corporate Accounting and Finance. 22(4), 3-14.
Mihret, D. G. & Yismaw, A. W. (2007). Internal audit effectiveness: An ethiopian public sector. Managerial
Auditing Journal. 22(5), 470-484.
Ngowsiri, S., Ussahawanitchakit, P, & Pratoom, K. (2013). Strategic knowledge management creativity and
service performance. Review of Business Research. 13(4), 5-38.
Ninlaphay, S., Ussahawanitchakit, P., & Boonlua, S. (2012). International control system effectiveness and
ongoing firm sustainability: Evidence from financial business in Thailand. Journal of International
Finance and Economics. 12(3), 193-216.
Nunnally, J. C. & Bernstein, I. H. (1994). Psychometric theory. New York: McGraw-Hill.
Pongpanpattana, J. & Ussahawanitchakit, P. (2012). Intelligent learning, Internal audit report and
internal audit performance: Empirical evidence from Thai-Listed firms. Journal of International
Finance and Economics. 12(4), 49-60
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from http:// www.knowledgeleader.com/
Roth, J. (2003). How do internal auditors add value?. Internal Auditor. 10, 33 – 37.
Samuel, H. N. & Afiah, N. N. (2013). The impact of objectivity, proficiency and due professional care of
auditors to quality of performance audit results: Survey on audit teams of Jakarta provincial
inspectorate. Proceedings of 8th Asian Business Research Conference. 1(2).
Santos, G., Mendes, F., & Barbosa, J. (2011). Certification and integration of Management systems: the
experience of Portuguese small and medium enterprises. Journal of Cleaner Production. 19
(17-18), 1965-1974.
Savcuk, O. (2007). Internal audit efficiency evaluation principles. Journal of Business and Economic
Management. 13(4), 275 – 284.
SEC. (2003). Report pursuant to the section 704 of the Sarbanes-Oxley Act of 2002. Washington: Securities
and Exchange Commission.
Srichanapun, P., Ussahawanitchakit, P., & Boonlua, S. (2013). Internal audit proficiency and firm goal
achievement: An empirical investigation of Thai-Listed firms. International Journal of Business
Research. 13(2), 111-136.
Srikarsem, U. & Ussahawanitchakit, P. (2009). Management audit effectiveness and organizational survival
of Thai-Listed firms: Mediating role of value added performance, governance outcome and
outperforming market position. International Journal of Business Research. 10(5), 1-25.
Sumritsakun, C. & Ussahawanitchakit, P. (2009). Internal audit innovation and firm stability of Thai listed
company: How do implement in an organization. Journal of Academy of Business and
Economics. 9(4), 1-23.
Thipsri, N. & Ussahawanitchakit, P. (2009). An empirical assessment of NPD strategies of Thai Electronics
business: How do the strategies affect market outcomes?. International Journal of Business
Strategy. 9(2), 69-90.
Vasarhelyi, M. A., Alles, M., Kuenkaikaew, S., & Littley, J. (2012). The acceptance and adoption of
continuous auditing by internal auditors: A micro analysis. International Journal of Accounting
Information Systems. 13(3), 267-281.
Waenkaeo, K. & Ussahawanitchakit, P. (2011). Social responsibility accounting and firm survival: Evidence
from ISO 14000 businesses in Thailand. Journal of International Business and Economics. 11(3),
56-85.
Weidenmier, M. & Ramamoorti, S. (2006). Research opportunities in information technology and internal
auditing. Journal of Information System. 20, 205-219.
Weiner, J. (2013). Financial data: Transparency & privacy. Mortgage Banking. 73(7), 85-86.
Zaccaro, S. J. &. Klimoski, R. J. (2002). The nature of organizational leadership: An introduction. San
Fransisco, CA7 Jossey-Bass.
Alles, M.G., Kogan, A., & Vasarhelyi, M. A. (2008).Putting continuous auditing theory into practice:
Lessons from two pilot implementations. Journal of Information Systems. 22(2), 195-214.
Amirhossein, A. & Raana, N. A. (2011).The study of relationship between organizational structure and the
competency of experts in Iran national gas company. Interdisciplinary Journal of Contemporary
Research in Business. 3(4), 865-880.
Arena, M. & Azzone, G. (2009). Internal audit departments: Adoption and characteristics in Italian
companies. International Journal of Auditing. 11, 91-114.
Archambeault, D. & Holt, T.P. (2008). The need for an internal auditor report to external stakeholders to
improve governance transparency. American Accounting Association. 22(4), 375-388.
Asare, S. K., Davidson, R. A., & Gramling, A. A. (2008). Internal auditors’ evaluation of fraud factors in
planning and audit: the importance of audit committee quality and management incentives.
International Journal of Auditing. 12(3), 181-203.
Bernardo, M. C., Marti, K., & Stanislav, H. I. (2010). An empirical study on the integration of management
system audits. Journal of Cleaner Production. 18, 486-495.
Berry, W. D., & Feldman S. (1985). Multiple regressions in practice. Newbury Park (CA): Sang Publications.
Beyer, A. & Sridhar, S. S. (2006). Effects of multiple clients on the reliability of audit reports. Journal of
Accounting Research. 44(1).
Bierstaker, L. J. & Arnold, W. (2004). Does the adoption of a business risk audit approach change
internal control documentation and testing practices? International Journal of Auditing. 8(1), 67.
Carlo, G. & Randall, B.A. (2002).The development of a measure of prosocial behaviors for late
adolescents faculty publication, Department of Psychology. Journal of Youth and Adolescence.
31(1), 31–44.
Chen, Y.-J., Chen, Y.-M., & Chu, H.-C. (2009). Development of a mechanism for ontology-based product
lifecycle knowledge integration. Expert Systems with Applications. 36, 2759-2779.
Cohen, J., Krishnamoorthy, G., & Wright, A. (2008). Waste is our business, Inc.: The importance of non-
financial information in the audit planning process. Journal of Accounting Education. 26 (3), 166-
178.
Cooper, B.J., Leung, P., & Wong, G. (2006). The Asia pacific literature review on internal auditing.
Managerial Auditing Journal. 21(8), 822-834.
DeBoskey, D. G. & Gillett, P. R. (2013). The impact of multi-dimensional corporate transparency on us
firms’ credit ratings and cost of capital. Review of Quantitative Finance and Accounting. 40(1),
101-134.
Enberg, C. E. (2012). Knowledge integration in coopetitive R&D projects –The management of conflicting
logics. International journal of Project Management. 30, 771-780.
Fadzil. H.F., Haron, H., & Jantan, M. (2005). Internal auditing practices and internal control system.
Managerial Auditing Journal. 20(8), 844-866.
Goodwin-Stewart, J. & Kent, P. (2006). The use of internal audit by Australian companies. Managerial
Auditing Journal. 21(1), 81-101.
Gramling, A, A., Maletta, M. J., Schneider, A., & Church, B. K. (2004). The role of the internal audit
function in corporate governance: A synthesis of the extant internal auditing literature and
directions for future research. Journal of Accounting Literature. 23, 194-244.
Hair, J.F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis: A global
perspective. New Jerrey: Pearson Publishing.
Hatfield, R. C., Agoglia, C. P., & Sanchez, M. H. (2008). Client characteristics and the negotiation tactics
of auditors: implications for financial reporting. Journal of Accounting Research. 46(5).
Hermalin, B. E. & Weisbach, M. S. (2007). Transparency and corporate governance national bureau of
economic research. Massachusetts Avenue Cambridge. 12875 (1), 1-28.
Hurtt, K. R. (2010). Development of an instrument to measure professional skepticism. Auditing: A Journal
of Practice and Theory. 29(1), 149-171.
Institute of Internal Auditors. (IIA). (2009). The role of internal auditing in enterprise- wide risk management.
The institute of internal auditors: Altamonte springs. Retrieved February 2, 2016, from
http://www.ucop.edu/enterprise-risk- management/_files/role_intaudit.pdf
Kaur, G. & Mishra, R. (2010). Corporate governance failure in India: A study of academicians perception.
The IUP Journal of Corporate Governance. 5, 99-112.
Kodama, M. & Boundaries, M. (2009). Innovation and knowledge integration in the Japanese firm.
Long Rang Planning. 42, 463-494.
Laohamethanee, W. & Ussahawanitchakit P. (2012). Audit professional skepticism: An empirical
investigation of certified public accountants (CPAs) in Thailand. Journal of International
Management Studies, 12(4), 60-77.
Lin, S., Pizzini, M., Vargus, M., & Bardhan, I.R. (2011). The role of the internal audit function in the
disclosure of material weakness. The Accounting Review. 86(1), 287-323.
Mard, M. J. (2011). Transparency in collaboration: principles of transparency specific to financial analyses.
IP Litigator. 39-41.
McCoy, N., Burnett, R., Friedman, M., & Morris, M. (2011). Internal audit: How to develop professional
skepticism. The Journal of Corporate Accounting and Finance. 22(4), 3-14.
Mihret, D. G. & Yismaw, A. W. (2007). Internal audit effectiveness: An ethiopian public sector. Managerial
Auditing Journal. 22(5), 470-484.
Ngowsiri, S., Ussahawanitchakit, P, & Pratoom, K. (2013). Strategic knowledge management creativity and
service performance. Review of Business Research. 13(4), 5-38.
Ninlaphay, S., Ussahawanitchakit, P., & Boonlua, S. (2012). International control system effectiveness and
ongoing firm sustainability: Evidence from financial business in Thailand. Journal of International
Finance and Economics. 12(3), 193-216.
Nunnally, J. C. & Bernstein, I. H. (1994). Psychometric theory. New York: McGraw-Hill.
Pongpanpattana, J. & Ussahawanitchakit, P. (2012). Intelligent learning, Internal audit report and
internal audit performance: Empirical evidence from Thai-Listed firms. Journal of International
Finance and Economics. 12(4), 49-60
Rossiter, C. (2011). How internal audit adds value to the governance process. Retreived February 1, 2015,
from http:// www.knowledgeleader.com/
Roth, J. (2003). How do internal auditors add value?. Internal Auditor. 10, 33 – 37.
Samuel, H. N. & Afiah, N. N. (2013). The impact of objectivity, proficiency and due professional care of
auditors to quality of performance audit results: Survey on audit teams of Jakarta provincial
inspectorate. Proceedings of 8th Asian Business Research Conference. 1(2).
Santos, G., Mendes, F., & Barbosa, J. (2011). Certification and integration of Management systems: the
experience of Portuguese small and medium enterprises. Journal of Cleaner Production. 19
(17-18), 1965-1974.
Savcuk, O. (2007). Internal audit efficiency evaluation principles. Journal of Business and Economic
Management. 13(4), 275 – 284.
SEC. (2003). Report pursuant to the section 704 of the Sarbanes-Oxley Act of 2002. Washington: Securities
and Exchange Commission.
Srichanapun, P., Ussahawanitchakit, P., & Boonlua, S. (2013). Internal audit proficiency and firm goal
achievement: An empirical investigation of Thai-Listed firms. International Journal of Business
Research. 13(2), 111-136.
Srikarsem, U. & Ussahawanitchakit, P. (2009). Management audit effectiveness and organizational survival
of Thai-Listed firms: Mediating role of value added performance, governance outcome and
outperforming market position. International Journal of Business Research. 10(5), 1-25.
Sumritsakun, C. & Ussahawanitchakit, P. (2009). Internal audit innovation and firm stability of Thai listed
company: How do implement in an organization. Journal of Academy of Business and
Economics. 9(4), 1-23.
Thipsri, N. & Ussahawanitchakit, P. (2009). An empirical assessment of NPD strategies of Thai Electronics
business: How do the strategies affect market outcomes?. International Journal of Business
Strategy. 9(2), 69-90.
Vasarhelyi, M. A., Alles, M., Kuenkaikaew, S., & Littley, J. (2012). The acceptance and adoption of
continuous auditing by internal auditors: A micro analysis. International Journal of Accounting
Information Systems. 13(3), 267-281.
Waenkaeo, K. & Ussahawanitchakit, P. (2011). Social responsibility accounting and firm survival: Evidence
from ISO 14000 businesses in Thailand. Journal of International Business and Economics. 11(3),
56-85.
Weidenmier, M. & Ramamoorti, S. (2006). Research opportunities in information technology and internal
auditing. Journal of Information System. 20, 205-219.
Weiner, J. (2013). Financial data: Transparency & privacy. Mortgage Banking. 73(7), 85-86.
Zaccaro, S. J. &. Klimoski, R. J. (2002). The nature of organizational leadership: An introduction. San
Fransisco, CA7 Jossey-Bass.
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Published
25-10-2018
How to Cite
Khammongkol, W., Ussahawanitchakit, P., & Janjarasjit, S. (2018). Effect of Internal Audit Excellence Capability on Firm Goal Achievement of Hotel Businesses in Thailand. Journal of Accountancy and Management, 10(3), 120–135. Retrieved from https://so02.tci-thaijo.org/index.php/mbs/article/view/222947
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