Internal auditor communications: an experimental investigation of managerial perceptions
ISSN: 0268-6902
Article publication date: 14 May 2019
Issue publication date: 24 May 2019
Abstract
Purpose
The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement.
Design/methodology/approach
The experiment involved a 2 × 2 × 2 design with internal auditor gender, mode of communication and root cause variables randomly assigned to 228 experienced managers.
Findings
When the internal auditor includes a root cause for an identified deficiency in an internal audit report, management perceptions of the quality of that report improve. The gender of the internal auditor who communicates the audit finding with management does not significantly impact management’s perceptions. Additionally, communicating the internal audit report via e-mail instead of videoconference results in improved managerial perceptions of the quality of the internal auditor. While improvements in perceptions of internal auditor quality lead to greater agreement with internal auditor recommendations, improvements in perceptions of report quality lead to greater implementation of internal-auditor-recommended remediation strategies.
Research limitations/implications
The operationalization of the manipulated variables of interest (communication mode, gender and root cause) may limit the generalizability of the study’s results.
Practical implications
The paper includes managerial implications for internal auditors’ choice of communication mode and inclusion of a root cause in interim internal audit reports.
Originality/value
This study provides evidence on the factors that could improve management’s perceptions of internal auditors’ work. The findings can help organizations, such as the Institute of Internal Auditors, to better understand how to address the needs of those who communicate with internal auditors.
Keywords
Acknowledgements
The authors would like to thank the participants at the American Accounting Association’s Accounting Information Systems Section 2018 Midyear Meeting for their insightful comments and suggestions. This study was supported by a grant from Babson College and a summer research grant from Hofstra University’s Frank G. Zarb School of Business.
Citation
Farkas, M., Hirsch, R. and Kokina, J. (2019), "Internal auditor communications: an experimental investigation of managerial perceptions", Managerial Auditing Journal, Vol. 34 No. 4, pp. 462-485. https://doi.org/10.1108/MAJ-06-2018-1910
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited