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  • 1 Corvinus University of Budapest
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This study examines the relationship between the existence and independence of internal audit and other corporate governance factors in an emerging market, building on disclosed data from Hungarian listed companies in 2011. The results indicate that almost half of the listed fi rms use internal audit, however, independence of the function is less common. Ordinal regression results confi rm the negative impact of concentrated foreign ownership on the need of internal audit, and the complementary relation between internal audit and supervisory board monitoring. The complementary role of internal audit to external one is partially evidenced. The results also indicate that larger fi rms are supposed to establish internal audit and strengthen its independence more than smaller ones. The fi ndings of the study have important implications for sound corporate governance in Hungary. The study, by assessing the institutional and regulatory context of an emerging market, contributes to the literature by providing an improved understanding of the existence and independence of internal audit.

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