Internal Audit Competency and Financial Reporting Quality: Evidence from LinkedIn Human Capital Data

SUMMARY Limited availability of human capital data on the internal audit function (IAF) has constrained research this topic. This study overcomes certain limitations by using LinkedIn from Revelio Labs. Using longitudinal individual IAF employees, we document that experience, education, and size are associated with higher financial reporting quality. Specifically, find competency is inversely propensity for material weaknesses misstatements. We further firms respond to these adverse events investing in competency, results driven improvements experience size. Finally, positively remediation weaknesses. Our findings can help leaders focus shaping their functions aid them garnering support investment management board. JEL Classifications: M40; M41; M42.