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Voluntary Adoption of Internal Audit by NASDAQ Firms and Its Impact on Internal Control Reporting

Omar Watts et al.

International Journal of Auditing2026https://doi.org/10.1111/ijau.70025article
AJG 2ABDC A
Weight
0.50

Abstract

NASDAQ firms are not required to have an internal audit function. We exploit this voluntary setting to provide further insight into internal audit's role as a governance function. We search proxy statements and other sources to identify whether NASDAQ firms have an internal audit function. Firms with a higher risk profile are more likely to have an internal audit function, whereas smaller/resource constrained firms are less likely to invest in internal audit. NASDAQ firms with an internal audit function are more likely to report a material weakness under Sarbanes‐Oxley Section 302 or 404, indicating that internal audit reduces information asymmetry by communicating internal control issues.

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https://doi.org/https://doi.org/10.1111/ijau.70025

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@article{omar2026,
  title        = {{Voluntary Adoption of Internal Audit by NASDAQ Firms and Its Impact on Internal Control Reporting}},
  author       = {Omar Watts et al.},
  journal      = {International Journal of Auditing},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/ijau.70025},
}

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Voluntary Adoption of Internal Audit by NASDAQ Firms and Its Impact on Internal Control Reporting

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.