Download or read book The impact of internal audit outsourcing on the perceptions and decisions of bank loan officers written by Ellen M. Melad (CPA) and published by . This book was released on 2016 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: The practice of outsourcing the internal audit to public accounting firms has become increasingly extensive, though it has been a controversial issue worldwide. The objective of this study is to assess and compare the bank loan officers’ perceptions of external auditor’s objectivity, financial statement reliability and the lending decisions when the company outsources its internal audit function to public accounting firms. Respondents were conveniently selected and randomly assigned to each of the four manipulated groups. Responses were obtained through the utilization of loan case scenario and an 11-point scale questionnaire. Subjects who failed the manipulation checks were omitted from all analyses resulting to 102 usable responses. Descriptive statistics, logistic regression and bootstrapping method were used to analyze the confidence level and likelihood of responses across all four levels of manipulation. Results revealed that bank loan officers perceived the external auditor to be less objective when the company outsources its internal audit function to another public accounting firm and to the same firm who performs the external audit with or without staff separation. There was also less confidence on the lending decisions made by the respondents. It is recommended that future researches be conducted exploring a broader area of internal audit outsourcing such as using non-Big 4 firms as the external auditors, considering the other existing manner of internal audit outsourcing such as co-sourcing and utilizing other financial statement users like investors.