Title: Internal governance mechanisms and the external audit quality: theoretical review of the relational issues

Authors: Rim Bouaicha

Addresses: Laboratory of Finance Governance Accounting, Faculty of Economics and Management of Sfax, University of Sfax, Tunisia

Abstract: Researches on the theme of governance have been developed. They were more limited to the choices made by the company but they have affected the question of interdependence of governance mechanisms. With the new governance role assigned to the external audit, another way of research is generated which is to extrapolate the nature of the relationship between an external governance mechanism, namely the external audit and the internal governance mechanisms. Nevertheless, the external audit mission must be of quality to better the assigned duties. We thus speak about the possible relationship between the quality of external audit and internal governance mechanisms (Wallace, 1984; O'Sullivan, 2000; Abbot and Parker, 2000; Sharma and Boo, 2008; Lin and Liu, 2009; Adeyemi and Fagbemi, 2010). At the level of this research, we clarify the nature of this relationship through a review of the different underlying theories.

Keywords: external audit quality; corporate governance; agency theory; signalling theory; internal governance mechanisms.

DOI: 10.1504/AJAAF.2015.071758

African Journal of Accounting, Auditing and Finance, 2015 Vol.4 No.1, pp.53 - 73

Received: 05 May 2015
Accepted: 05 May 2015
Published online: 17 Sep 2015 *

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