Information Asymmetries and Intra-Company Monitoring: an Empirical Analysis of Nonlinear Relationships Between Company Characteristics and the Size of the Internal Audit Function

Abstract The internal audit function (IAF) has become one of the main pillars good corporate governance. Empirical findings show that size IAF varies considerably across companies. This study analyzes relationships between selected company characteristics as determinants intra-company information asymmetries and an indicator monitoring. We test these by analyzing comprehensive survey data obtained from chief executives 283 Austrian, German, Swiss Using a nonparametric regression approach, we identify significant nonlinear size. empirical analysis identifies threshold levels for several metric characteristics, such number employees subsidiaries, whose with change its intensity.