Factors associated with the size of internal audit functions: evidence from Kuwait

Purpose This study aims to examine whether the size of internal audit functions (IAFs) is significantly related to factors documented by related prior auditing research, namely, diffusion of ownership, firm size, affiliation to the financial services industry, proportion of assets in the form of receivables and inventory, audit committee’s size and the presence of risk management committee. Design/methodology/approach Using data related to companies listed on the Kuwait Stock Exchange, this study uses a regression model to examine research hypothesis related to factors predicted to have an association with the size of the firm’s IAF. Findings The results of the current study provide evidence of a significantly positive relation between the size of the IAF and firm’s affiliation to the finance sector, audit committee’s size and the presence of a separate risk management committee. Such empirical evidence, which stems from the Kuwaiti market, is expected to be valuable for regulators and policy makers as well as audit researchers interested in linking it to the international empirical findings about this issue documented in other audit markets. Originality/value This study is original because it is the first to empirically examine factors associated with the size of IAFs in the GCC region, including Kuwait.