Factors Associated with Application of Risk-Based Internal Auditing

Risk-based internal auditing focuses on strategic analysis and avaluation of business process, risks and controls of an organization. By identifying, assessing, and monitoring a company’s risk, internal auditing helps assure that resources are adequate and focused on priorities. Generally, risk-based auditing assesses areas of heightened risk, and, more importantly, conducts continuous risk assessments. The purpose of this study is to analyze company-specific factors associated with adoption of risk-based auditing. It also seeks to examine the role of internal auditing in enterprise risk management (ERM).The final sample used for this study consists of 52 companies. Also, data were collected using a questionnaire. Results show that the number of firms applying risk-based approaches for planning the annual audit is greater in the finance industry than in non-finance industries. also, the number of firms applying risk-based approaches for planning each individual audit engagement is greater for firms in the finance industry than for firms not in the finance industry, and there is a significant association between the achive role of internal auditing in the implementation of ERM and membership of firms in the finance industry.