Motivated by the growing interest of governance regulators and researchers on internal audit function (IAF), this study examines the influence of family ownership on the levels of investment in IAF.
A sample of Malaysian listed companies for the period 2009 to 2016 is used. To test our hypothesis, the authors use pooled panel data regression based on two-way cluster-robust standard errors (firm and year).
The findings show that family ownership is negatively related to investment in IAF; in particular, investment in IAF is lower for family companies than non-family companies.
This study contributes to existing knowledge of IAF, and it provides significant insights for regulators and managers into the variation in governance structures between family and non-family companies, particularly in emerging markets in which substantial family ownership is common.
