The role of internal audit and audit committee in the implementation of enterprise risk management

The study evaluates the role of internal audit in the implementation of enterprise risk management (ERM). The study examines relationships between the competency, independence and working priority of internal audit and ERM implementation and moderating effects of audit committee support on the relationships. A survey on listed companies in Malaysia with internal audit units indicates that the internal audit independence is significantly related to the implementation of ERM for review and feedbacks. The study finds that internal audit work priority contributes significantly to the ERM implementation at all stages. The support by the audit committee is important in enhancing the effectiveness of internal audit in the ERM implementation particularly for the development of policy and procedures and strategy and follow-up actions. The inclusion of companies which outsource internal audit services to outside parties may enhance the validity and generalisability of the results.