Factors associated with convergence of internal auditing practices

Gerrit Sarens (Louvain School of Management, Université Catholique de Louvain, Louvain‐la‐Neuve, Belgium)
Mohammad J. Abdolmohammadi (Bentley University, Waltham, Massachusetts, USA)

Journal of Accounting in Emerging Economies

ISSN: 2042-1168

Publication date: 5 July 2011

Abstract

Purpose

The aim of this paper is to investigate a number of factors that are theoretically associated with convergence toward best practices in internal auditing.

Design/methodology/approach

The paper defines best practices as internal audit tools and techniques that are used by at least 67 percent of the internal audit functions (IAFs) in the USA. A sample of 26 countries and data from 1,708 IAFs were used in this study.

Findings

The paper finds evidence of a high degree of de facto convergence of internal auditing practices toward US best practices. It also finds that IAFs in emerging countries converge more rapidly to best practices than IAFs in developed countries. Finally, the use of the Institute of Internal Auditors' (IIA) Standards and an external quality assessment in the past three years are found to be positively and significantly associated with convergence toward US best practices.

Research limitations/implications

The most important limitation of the data used in the study is that they reflect respondents' perceptions, which may deviate from reality. Also, data were only available for one‐half of the emerging countries listed in the MSCI Global Standards Index. Limitations aside, this study has significant implications for future research investigating various factors associated with emerging countries rapidly converging toward US best practices.

Practical implications

The results support the IIA's efforts to unify internal auditing practices around the world via its Standards. However, the additional analysis shows that the impact of the Standards is rather limited. The results also imply that formal assessment of internal auditing practices results in a more substantial change in the adoption of best practices.

Originality/value

The convergence of internal auditing is a part of the convergence of corporate governance practices which has become a topic of interest in academic research. While internal auditing has developed over a relatively long period of time in developed countries, such development must take place over a shorter period of time in emerging countries to catch up with developed countries. The current study's findings indicate that convergence of internal auditing practice is not context‐free.

Keywords

Citation

Sarens, G. and Abdolmohammadi, M. (2011), "Factors associated with convergence of internal auditing practices", Journal of Accounting in Emerging Economies, Vol. 1 No. 2, pp. 104-122. https://doi.org/10.1108/20421161111138486

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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