The purpose of this paper is to examine the relation between internal audit function (IAF) characteristics and organizational variables and IAF’s self-investigation about fraud and irregularities (SIFI) in the French context.
This paper uses the responses of 96 chief audit executives (CAEs) to a global survey of the internal auditing profession carried out by the Institute of Internal Auditors Research Foundation (IIARF) in 2010. A logistic regression model is used to determine factors influencing IAF’s SIFI.
The authors’ findings reveal that IAF’s SIFI is positively correlated to independence and objectivity, the number of activities performed by the function, adoption of a systematic approach to evaluate the effectiveness of risk management and the size of the company.
This study examines the factors associated only to IAF’s investigation rather than assessment of the risk of fraud. It remains for future research to analyze determinants those related to internal auditors’ approaches when they evaluate the risk of fraud.
The findings have implications for CAEs who wish to improve the IAF’s ability to investigate fraud.
Even if the IIA has stipulated since 2009 that internal auditors must have knowledge to evaluate the risk of fraud, no disclosure requirement exists, in France, for IAF or its charter. The areas of research related to internal audit behavior in relation to fraud concern fraud risk investigation of financial fraud and management/employee misconduct.
The author is grateful to the IIARF for access to the CBOK 2010 database. She also thanks the anonymous reviewers for their careful reading and the relevance of their remarks.
Hazami-Ammar, S. (2019), "Internal auditors’ perceptions of the function’s ability to investigate fraud", Journal of Applied Accounting Research, Vol. 20 No. 2, pp. 134-153. https://doi.org/10.1108/JAAR-09-2017-0098Download as .RIS
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