The Report between Internal and External Audit in Context of the Cost of Insurance
Author:
Daniela CREŢU (COLOIU), Ph. D. Student
JEL:
M 48, M42, C 68, C 71
DOI:
Keywords:
control, internal audit, the agent theory, game theory
Abstract:
The paper presents a theoretical approach to the correlation between the internal and external audits. \r\nThe study is based on agent and games theories. This is appended with results from a practical survey that targets people`s perception on the introduction of some additional assurance to this matter in terms of checks and balances. The outcome is a direct correlation between the internal audit, the cost of the audit processes and the external audit. This is all based on a numerical model that factors in the quality level of the assurance brought in through the internal audit process. \r\nThe model presented is quantitative by nature. It describes a venue for concrete analysis, potential for unraveling opportunities, and opens potential applications of coherent strategies in the audit process. This study helps in the clarification of the choice of types, procedures and number of auditors employed by various organizations along with correlation to rationales behind the end result. \r\n\r\n\r\n