The Impact of Internal Audit Function in Enhancing the Financial Reporting Quality

Abstract

Internal audit function is a specific unit designated to monitor the quality of financial reporting practices at a company. The monitoring task conducted by internal audit function is covering the internal audit’s role and responsibilities; charter, audit plan and structure; skills and experience; and communication. The aim of this research is describing the important impact of internal audit function in enhancing the financial reporting quality. 87 companies listing at Indonesia Stock Exchange are already surveyed in 2015. Data are analyzed by multiple regression testing. The result shows that internal audit’s skills and experience has significant impact in enhancing the financial reporting quality. It is recommended that internal audit unit must develop their employees’ skills and experience in order to keep the financial reporting quality higher.