EVALUATION OF MANAGER'S PERCEPTIONS ON THE EFFECTS OF EFFECTIVE INTERNAL AUDIT SYSTEM DETERMINANTS ON FIRM PRODUCTIVITY: A RESEARCH IN MANUFACTURING ENTERPRISES WITHIN THE SCOPE OF BIST

Abstract

Purpose: The aim of this study is to examine the effects of an effective internal audit system on the productivity of manufacturing enterprises within the scope of BIST. Method: In the study, a questionnaire containing two scales was used to measure the effectiveness of internal auditing and the effect of internal auditing on productivity. As a result of online and face-to-face surveys conducted with 169 production enterprises within the scope of BIST, feedback was obtained from 101 enterprises. In the study, in which the perceptions of the managers of the enterprises related to the subject were investigated, the relationship between the effects of the determinants of internal audit effectiveness on the productivity of the enterprise was examined by multiple regression analysis. Findings: According to the results of the analysis carried out within the scope of the research, it is seen that the internal audit effectiveness positively affects the perceptions of the managers regarding the effect of the firm productivity. Managers think that high internal audit effectiveness is necessary for both productivity dimensions and productivity in general. In particular, managers who think that the independence of internal audit and the support of the internal audit unit from the senior management are among the factors affecting productivity; they argue that compliance with internal auditing standards and the effectiveness of internal auditing have a greater impact on the management productivity of the enterprise. Originality: The findings of the study add to the growing literature on the relationship between the determinants of an effective internal audit system and firm productivity, and raise awareness of the role of the internal audit function in an emerging economy, with government and business executives playing an important role in promoting and implementing the internal audit system.