The relationship between internal audit and foreign direct investment

This paper explores the influence of certain internal audit (IA) characteristics on the likelihood that FDI will be attracted. In making its investigation, the study uses data from the IIA CBOK database, and the World Bank database for 152 countries for the period 2012–2016. Ordinary least square methodology is used for analysis purposes, and the finding is that increases in FDI inflows result from effective IA. In particular, the most influential characteristic of IA in this respect is IA independence and competence, a finding which is valuable to academics and policy-makers who are keen to identify the drivers of FDI.