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Psychological capital, moral courage and internal audit effectiveness (IAE): a complementary or substitution effect

Imen Khelil (Department of Accounting, Prince Sultan University, Riyadh, Saudi Arabia)

Managerial Auditing Journal

ISSN: 0268-6902

Article publication date: 13 December 2022

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Abstract

Purpose

This paper aims to examine the impact of two psychological drivers, namely, psychological capital (PsyCap) and moral courage on internal audit effectiveness (IAE) and whether there is a substitution effect or complementary role of these psychological factors on IAE in the Tunisian setting.

Design/methodology/approach

IAE is measured using managers’ perceptions of the internal audit function based on 157 responses received from managers, while the remaining variables (including PsyCap and moral courage) are based on 157 internal auditors’ responses.

Findings

Findings suggest that PsyCap has a positive and significant impact on IAE, while moral courage has an insignificant impact on the same variable. Accordingly, PsyCap and moral courage are not playing a complementary role in improving IAE, and PsyCap substitutes for moral courage in increasing IAE. A battery of checks using interaction terms between moral courage and PsyCap corroborate these findings.

Originality/value

To the best of the author’s knowledge, this study fills one of the major research gaps in the auditing literature by emphasizing the role played by PsyCap in improving IAE. The findings may have policy implications for top firm management, especially when recruiting internal auditors who should enjoy efficacy, hope, resilience and optimism to help the organization achieve its strategic objectives and increase its performance.

Keywords

Acknowledgements

The author is grateful for the helpful comments of the two anonymous reviewers and the editor. The author would like to thank Prince Sultan University for their support.

Citation

Khelil, I. (2022), "Psychological capital, moral courage and internal audit effectiveness (IAE): a complementary or substitution effect", Managerial Auditing Journal, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/MAJ-01-2022-3429

Publisher

:

Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

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