Florida International University Audit Committee & Chief Internal Auditor Worksheet

The excel file “CAE” has selected data from a survey of Chief Internal Auditors (CIA) of public companies from around the world.

 This survey was conducted by the Institute of Internal Auditors. The columns are as follows:

EU = 1 if the company is from the European Union (EU), 0 if not

USA = 1 if the company is from the USA, if not

FEM = 1 if the respondent is a female, 0 if not

EXP = Number of years of experience as Chief Internal Auditor

SIZE = 1 to 4, where 1 is smallest and 4 is largest (in terms of the number of employees)

MTG = 1 if internal audit is used as a “management training ground,” 0 if not

MEET = Number of meetings between audit committee and the Chief Internal Auditor

PVT = 1 if the audit committee met in private with the CIA, 0 if not

HIRE = 1 if the audit committee is charge of hiring and firing the CIA, 0 if not

SUPP = 1 if the CIA believes the Audit Committee provides adequate support to internal auditing, 0 if not

FUND = 1 if the CIA believes the funding for internal auditing is sufficient, 0 if not

FIN = 1 if the company is in the finance sector, 0 if not.

Required:

1. What are some factors that can explain variation in the number of meetings between the audit committee and the Chief Internal Auditor?

2. First, explain why you think there may be an association.

3. Then, test your hypothesis using regression analysis to examine the data and explain the findings with appropriate reference to the INTERNATIONAL STANDARDS FOR THE PROFESSIONAL PRACTICE OF INTERNAL AUDITING (STANDARDS).

(You may find that some factors are associated with the number of meetings, while other factors are not. But you must examine at least three different factors, so your regression must have at least three explanatory (i.e., independent) variables.)

Then, use the data in the Excel file titled “CAE” to answer Part 2 of the assignment

I am providing you the question a week in advance, so that you have adequate time to prepare.

 You can use any statistical software, including Excel or R-Studio, to do the regression analysis.

 Whatever software you use, please be sure to include the output from the regression analysis as an appendix to your report.