Constructing internal audit quality evaluation index: evidence from listed companies in Jiangsu province, China

Internal audit quality is the foundation for a company's survival and development across the world. As a result, global efforts have been made to develop a scientific and accurate evaluation index for internal audit quality. However, literature shows that existing internal audit quality evaluation indices have many flaws, such as a lack of systematic internal audit evaluation indicators, poor execution, and inability to identify priority areas. To address gaps in the literature, this study intended to construct an internal audit quality evaluation index utilizing the joint approaches of the Balanced Scorecard, Delphi Process, and Analytical Hierarchy Process. A systematic literature review, examination of companies' internal audit guidelines, Balanced Scorecard, and Delphi approaches resulted in a multilevel internal audit quality evaluation index with five dimensions (stakeholder satisfaction, stakeholder contribution, financial results, internal audit process, and learning and growth) and 36 indicators. The Analytical Hierarchy Process revealed that the most prioritized dimension is the internal audit process. The consistency ratio and evaluation feedback from the listed companies' internal auditors, management, and audit committee members revealed that the results are valid and reliable.