An investigation of risk-based auditing (RBA) relationships from the stakeholders' perspective using PLS-SEM

Abstract

Purpose

The present paper aims at the identification of the critical variables of risk-based auditing (RBA). The variables under examination are the internal audit (IA), the audit committee (AC) and the cooperation between the RBA and the stakeholders (audit committee, external auditors, internal auditors, board of directors, fraud investigators, chief risk manager) (COOP).

Design/methodology/approach

A questionnaire survey was conducted among 176 Greek companies. The questionnaires were addressed to accountants, internal auditors, managers, chief risk managers and the board of directors. A total of 96 questionnaires have been collected and analyzed. PLS-SEM modeling was used as a tool to test hypotheses and analyze the findings.

Findings

The results show that three variables, i.e. the internal audit, the audit committee and the RBA cooperation with stakeholders have a statistically significant and positive effect on risk-based auditing (RBA). Additionally, the existence of partial-complementary mediation of the internal audit in the audit committee-RBA interaction is confirmed.

Originality/value

This study is an original research that identifies the essential variables of risk-based auditing in Greek companies. It attempts to analyze the perceptions of all stakeholders in risk-based auditing, including the internal audit, the audit committee, etc. and is not restricted only on internal auditors. Furthermore, the analysis is conducted with PLS-SEM Modeling, which is an innovative tool of testing hypotheses and analyzing results.

Citation

Moschidis, S., Drogalas, G., Chatzipetrou, E. and Lois, P. (2024), "An investigation of risk-based auditing (RBA) relationships from the stakeholders' perspective using PLS-SEM", EuroMed Journal of Business, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/EMJB-12-2022-0211