THE EFFECTS OF NEGATIVE AUDIT AND AUDIT ENVIRONMENT ON THE INTERNAL AUDITOR PERFORMANCE: MEDIATING ROLE OF AUDITING PROCESS INDEPENDENCE

Abstract

The performance of internal auditors has become a requirement for effective financial reporting, which is the primary function of audit companies. This feature requires the attention of fresh researchers and policymakers. Therefore, the current study explores the effect of negative audits and audit environments on the performance of internal auditors in Iraqi manufacturing enterprises. The research also investigates the function of audit process independence as a mediator between negative audits, the audit environment, and the performance of internal auditors in Iraqi manufacturing enterprises. Using survey questionnaires, the researchers collected primary data from the internal auditors of Iraqi industrial organizations. SPSS-AMOS, a tool for primary data analysis, was used to examine the relationship between variables. The results demonstrated a favorable relationship between negative audit and audit environment and the internal auditor performance of Iraqi manufacturing enterprises. The results also revealed that the independence of the auditing process strongly mediates the relationship between negative audits, audit environment, and internal auditor performance of Iraqi manufacturing enterprises. The article provides regulators with advice for drafting laws that would increase the effectiveness of internal auditors by providing an effective audit environment.