Organizational identity, professional identity salience and internal auditors’ assessments of the severity of internal control concerns
ISSN: 0268-6902
Article publication date: 8 July 2021
Issue publication date: 27 July 2021
Abstract
Purpose
This paper aims to examine whether increasing the salience of the internal auditor’s professional identity, defined by the expectations of their professional group, increases internal auditors’ judgments of the severity of internal control concerns when their organizational identity is high.
Design/methodology/approach
This paper tests the hypothesis using a laboratory experiment with internal auditors as participants.
Findings
The results support the hypothesis that professional identity salience moderates the relation between organizational identity and the assessed severity of identified internal control weaknesses. Increasing the salience of professional identity results in a more severe assessment of identified internal control weaknesses when organizational identity is high than when it is low.
Originality/value
Prior research in the lab and in the field provides mixed results about the impact of organizational identity on internal auditors’ judgments of the severity of identified internal control concerns. This paper contributes to the discussion on this issue. In addition, the results have implications for the debate about the benefits and costs of in-house versus out-sourced internal audit functions.
Keywords
Acknowledgements
The authors would like to thank Doug Brown, Adam Presslee, Vishal Baloria, Krista Fiolleau, Sally Gunz, Clark Hampton, Kun Huo, Steve Kaplan, Khim Kelly, Ken Klassen, Tim Mitchell and Alan Webb for helpful comments on earlier versions of this paper. In addition, the authors thank participants at the CAAA Annual Meeting, the AAA Annual Meeting, the AAA Audit Mid-Year Meeting and the Southern Ontario Behavioral Decision Research Conference for their comments. Finally, the authors are grateful to the IIA, the Canadian Public Accountability Board and the EY Professorship at the University of Central Florida for project funding.
Citation
Burt, I. and Libby, T. (2021), "Organizational identity, professional identity salience and internal auditors’ assessments of the severity of internal control concerns", Managerial Auditing Journal, Vol. 36 No. 4, pp. 513-534. https://doi.org/10.1108/MAJ-02-2020-2566
Publisher
:Emerald Publishing Limited
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