Internal audit outsourcing: A study on companies listed in ISE ? 100 index

Internal auditing activities are of vital importance for management controls in organizations. These activities, which are performed to provide information that managements need in a reliable way, have been a growing concern for the organizations at the present. Internal auditing helps companies to achieve their objectives. These activities which are traditionally performed by internal auditors assigned within their own organizations may include outsourcing such as accountants and professional auditors.It is crucial to predict the standpoint of companies which serve in different fields in Turkey in case of the enactment of the New Turkish Commercial Draft. This study examines the perceptions of companies listed in (Istanbul Stock Exchange) ISE-100 index on outsourcing in internal auditing.Moreover, the study seeks to determine the influential factors of in-house sourcing and outsourcing and how outsourcing affects the direction of internal auditing efficiency through a model. Questionnaires were administered to 56 companies listed in ISE 100 index and the results reveal that personnel, cost and security, perfection, control and evaluation were found to be influential factors of internal auditing activities. Moreover, two factors, namely qualitative and basic factors, were also found to be influential in the provision of internal auditing outsourcing activities. In terms of the efficiency of internal auditing, qualitative factor was found to be a significant determinant of outsourcing while the basic factor did not yield statistically significant result. Therefore, it is concluded that qualitative factor, which refers to the promotion of the quality of internal auditing could lead to increase efficiency of internal auditing outsourcing activities of companies listed in ISE-100 index.