Evidence for increasing the focus on strategic risk in HRM audits

Abstract

Purpose

To communicate the development and results of strategic human resource management (HRM) research to the audit research community in order to stimulate audit research specific to HRM audits.

Design/methodology/approach

Prior research that served as impetus for this paper is discussed. The findings of other studies are presented to make a case for the business impact of strategic human resource management practices.

Findings

Studies on the competitive environment of firms, theoretical development in HRM, empirical work on the link between HRM practice and firm performance, and emerging models based on intellectual capital, suggest that there are compelling reasons for internal audit to devote substantial resources to the evaluation of strategic risk in HRM audits.

Research limitations/implications

The literature is still developing. The literature presented here is not an exhaustive list and does not include all findings, but rather what we perceive to be the most important findings.

Practical implications

Both “high performance work systems” and “strategic fit” should guide internal audit in planning, designing audit programs, and executing strategic audits of human resources consistent with the risk management paradigm.

Originality/value

This paper bridges a gap between the human resource management literature and the internal auditing literature.

Citation

Verreault, D.A. and Hyland, M. (2005), "Evidence for increasing the focus on strategic risk in HRM audits", Managerial Auditing Journal, Vol. 20 No. 5, pp. 524-543. https://doi.org/10.1108/02686900510598876