Audit Committees Effectiveness and its Impact on the Objectivity of the Internal Auditors: Evidence from United Arab Emirates

Abstract

Internal auditors objectivity continue to be an important concept in the internal auditing profession, and audit committees can be viewed as a key safeguard mechanism for internal auditors in managing their professional objectivity. This study examines audit committee effectiveness and its impact on the objectivity of internal auditors in the bank sector in UAE. Data were obtained from all the banks listed in Abu Dhabi Securities Exchange using questionnaire technique. The research result reveals that there is significant positive effect of audit committee effectiveness on the objectivity of internal auditors; the results indicate that having an effective audit committee member will enhance the internal auditors objectivity. Also, the result shows significant positive effect on the objectivity of internal auditors related to having effective audit committee with authority over the CAE employment (appointment/dismissal). Also, the result indicates significant difference between the effectiveness of the audit committee members and the internal auditors objectivity related to qualifications, and no relationship between the effectiveness of the audit committee members and the internal auditors objectivity related to the experience. The research reveals that effective audit committees strengthen the position of the internal audit function by increasing the objectivity of internal auditors. Keywords: Audit Committee Effectiveness, Listed Banks, United Arab Emirates, Objectivity, Internal Auditors