The Effectiveness of Cooperative Auditing on External Auditors’ Reliance Decisions: The Mediating Role of Internal Audit Quality in Risk Management

The purpose of this study is to examine the effect of cooperative auditing on external auditors’ reliance decisions, with particular emphasis on internal auditors’ participation in risk management and internal audit quality. A conceptual framework grounded in auditing standards and prior literature was developed and empirically tested using partial least squares structural equation modeling (PLS-SEM). Data were collected through a structured questionnaire administered to professional external auditors in Iran. The measurement model was evaluated in terms of reliability and validity, and the structural relationships were assessed using a bootstrapping procedure. The results indicate that internal auditors’ participation in risk management has a significant positive effect on internal audit quality, while internal audit quality significantly influences external auditors’ reliance decisions. Moreover, internal audit quality fully mediates the relationship between internal auditors’ participation in risk management and external auditors’ reliance decisions. Overall, the findings highlight the pivotal role of internal audit quality in strengthening cooperative auditing practices.

کلیدواژه ها:

Cooperative Auditing ، External Auditors’ Reliance ، Internal Audit Quality ، Risk Management