Search results

This paper aims to examine the association between the working relationship between internal and external auditors and the moral courage of internal auditors to report management fraud in the Tunisian setting.

Data are gathered from 163 internal auditors working in Tunisian companies and a partial least squares–structural equation model (PLS-SEM) is used to test the hypothesis regarding the effect of the cooperation between internal and external auditors on internal auditors’ moral courage.

The results of this study provide strong empirical support for the positive impact of the working relationship between internal and external auditors on internal auditors’ moral courage to report management fraud and unethical behaviors.

The reported results increase the awareness of Tunisian regulators to enact regulations that strengthen the collaboration between internal and external auditors to promote internal auditors’ moral courage and then limit fraud and improve organizational performance in the Tunisian setting.

This paper fills one of the major research gaps in internal audit and moral courage research streams by revealing that the courageous behavior of internal auditors can be fostered by specific means efficacy such as the working relationship between internal and external auditors.

An important part of the effectiveness of a company is related to the stimuli of the organizational voice, which provides the context for participation and the emergence of moral courage in performing organizational tasks. Although individual voice stimulation cannot be easily generalized because of the wide range of criteria affecting it, but in a general category, individual voice stimuli can be separated into internal and external criteria. Therefore, this research first aims to examine internal and external stimuli on individual voice and then examines the effect of individual voice on internal auditors’ moral courage and effectiveness.

The target population in this study were internal auditors of capital market companies that were examined in the period of 2020. The research tool was a questionnaire and partial least squares analysis was used to fit the model and test the research hypotheses.

The results of testing the hypotheses show that self-efficacy (hope and resilience) as internal drivers and independence of internal audit performance and perceived supervisor support (external drivers) have a positive effect on moral courage and effectiveness of the internal auditor.

These conclusions suggest that if behavioral incentives are considered, auditors’ level of behavioral audacity in more realistically disclosing the financial performance of their companies can be expected to increase. It should also be noted that the results of this study can increase the level of effectiveness of internal auditors’ functions and their behavioral knowledge in the direction of professional functions.

This study aims to examine the effect of professional commitment, commitment to ethics, internal locus of control and emotional intelligence on the ability to detect fraud through reduced audit quality behaviors.

The analysis unit is the internal auditor in internal control unit at state Islamic religious higher education in Indonesia. Data processing used covariance-based structural equation modeling using Lisrel Software and the Sobel test to verify the direct and indirect effects.

This study found empirical evidence that professional commitment and emotional intelligence positively impact the ability to detect fraud. Commitment to ethics and emotional intelligence has a negative effect on reduced audit quality behaviors. Furthermore, this study also provides that commitment to ethics and emotional intelligence indirectly impacts on the ability to detect fraud through reduced audit quality behaviors.

The organization periodically monitors auditors’ behaviors, especially reduced audit quality behaviors, during the audit process and encourages regulators to formulate policies related to increasing the ability to detect fraud.

This study provides knowledge regarding the driving force of internal auditors to mitigate reduced audit quality behaviors and increase the ability to detect fraud.

This study aims to understand independence in internal auditing by investigating how internal auditor independence is constructed when analysed in its corporate governance context.

A critical discourse analysis (CDA) of the corporate governance reports of Swedish large stock market listed non-financial companies, for three consecutive years, is undertaken, using a theoretical lens of organisational embeddedness and operational coupling to understand independence as a situated practice.

The study develops four archetypes of internal auditor independence – autarchic, instrumental, symbiotic and subservient – and discusses each archetype's implications for independence, related to tripartite relations with management and the audit committee, regarding who has the mandate to direct work and how the work is done. It finds that internal auditors always have a capacity to be independent. Although they are not independent in relation to agents in the subservient archetype, they are independent of those down the organisational chain of command, suggesting independence is both situational and relational.

The analysis contributes a novel approach to the literature and develops a conception of independence using the dimensions of embeddedness and coupling. The archetypes offer an analytical framework for future studies on independence.

Internal auditors may understand their practice differently through the archetypes that result from this study.

Internal auditors' power relations within corporate governance further an understanding of the pressures on internal auditors and their role.

This study contributes new knowledge on the situatedness of independence by showing how internal auditors are embedded and coupled helps build their independence.

This paper investigate the antecedents of the public sector's senior management in interpersonal trust relationships involving sceptical internal audits in public services administrations. This is fundamental for a positive audit, as it affects the auditing relationship and assures a sound public administration.

The author surveyed 261 senior management from 24 Israel's local authorities (about 30%), representing large, medium and small administrations in Israel's North District.

The results indicate that senior management's antecedents to trust sceptically minded internal audits are positive for audit knowledge sharing. Findings also reveal that the internal auditor's ability, integrity and benevolence significantly impact senior management's trust. Whereas open communication does not significantly affect the senior management's propensity to trust, its satisfaction with its internal auditor fosters positive trust and support.

Understanding the antecedents of the senior public manager on internal audit benefits the audit outcomes. Albeit audit professional scepticism's interpersonal trust relationship with senior public manager influences the audit. Audits efficiently related to organisational culture and outcomes.

A new practical model of senior management trust antecedents is presented for a more effective auditing system and public administration. The model is original, as no other empirical studies have yet dealt with senior management's trust in internal audits in the public sector.

The purpose of this study is to investigate the factors affecting the silence of internal auditors. To this end, the impacts of the perceived climate of silence, professional commitment, independence commitment, role conflict and role ambiguity on internal auditor silence have been investigated. Furthermore, the effects of role conflict and role ambiguity through independence commitment on internal auditor silence were investigated.

The statistical population of the study consisted of Iranian internal auditors in 2021. The study used a self-administered survey of 217 internal auditors. In this research, a hierarchical component model in the partial least squares structural equation modeling analysis was used to examine the hypotheses.

The results of testing the hypotheses indicated that the perceived climate of silence and role ambiguity have positive effects, and professional commitment and independence commitment have negative effects on internal auditor silence. Furthermore, role conflict has an insignificant effect on internal auditor silence. In addition, role conflict and role ambiguity affect the internal auditor silence through the independence commitment.

This study examined the factors affecting the internal auditor silence by combining the construct of the perceived climate of silence that has been previously discussed in the field of management with the professional (professional commitment and independence commitment) and role (role conflict and role ambiguity) factors that are discussed in the internal audit profession. To the best of the author’s knowledge, this is the first study that examines the factors affecting internal auditor silence behavior. The importance of conducting this study is that it investigates a phenomenon among internal auditors that conflicts with the mission and origin of internal audit.

This research paper aims to investigate the effects of internal audit’s (IA) use of data analytics and the performance of consulting activities on perceived IA quality.

The authors conduct a 2 × 2 between-subjects experiment among upper and middle managers where the use of data analytics and the performance of consulting activities by internal auditors are manipulated.

Results highlight the importance of internal auditor use of data analytics and performance of consulting activities to improve perceived IA quality. First, managers perceive internal auditors as more competent when the auditors use data analytics. Second, managers perceive internal auditors’ recommendations as more relevant when the auditors perform consulting activities. Finally, managers perceive an improvement in the quality of relationships with internal auditors when auditors perform consulting activities, which is strengthened when internal auditors combine the use of data analytics and the performance of consulting activities.

From a theoretical perspective, this research builds on the IA quality framework by considering digitalization as a contextual factor. This research focused on the perceptions of one major stakeholder of the IA function: senior management. Future research should investigate the perceptions of other stakeholders and other contextual factors.

This research suggests that internal auditors should prioritize the development of the consulting role in their function and develop their digital expertise, especially expertise in data analytics, to improve perceived IA quality.

This research tests the impacts of the use of data analytics and the performance of consulting activities on perceived IA quality holistically, by testing Trotman and Duncan’s (2018) framework using an experiment.

This study aims to explore the effectiveness and reliability of the performance of internal auditor by the stakeholders for their decision making. The absence of rules and regulations generates the debate that the non-standard reporting of the assessment of the internal controls system’s assessment by internal auditor and reliance by the external auditor.

The study used the mixed-method (triangulation) for the analysis quantitative data was used for regression with Smart PLS 3.2.8, and the qualitative data was used to prove and strengthen the results. The data is collected for five IVs (Objectivity of IAF, Work Performance, Competence, Internal Control System’s Assessment and Sourcing of IAF) and their impact on two DVs (Effectiveness and Reliance). This study used five areas as the target audience (Internal Auditor, External Auditor, Professional bodies, Shareholders, SECP and SBP). A total of 150 respondents were approached and received a valid response of 98 respondents.

The study explores the positive relationship between Objectivity of IAF, Work Performance, Competence, Sourcing of IAF on Effectiveness and Reliance. Internal Control System’s Assessment having significant relation with Effectiveness and non-significant with reliance because the absence of rules makes it unreliable for stakeholders.

The study found that the system for reporting the internal control needs rules and regulations advancement on the immediate basis for the betterment and safeguard of stakeholders to avoid the events like WorldCom and ENRON.

The purpose of this paper is to examine whether the voluntary implementation of an internal audit department (IAD) by municipalities has any influence on external auditors' opinions.

This study population comprises the 308 Portuguese municipalities, from which the authors extracted a sample of 179. Financial and audit reports were collected from the period under analysis (2014–2017). The sample was then divided into two groups: municipalities that had voluntarily implemented an IAD and those that had not. Internal audit departments were characterized according to their robustness – whether they were more or less robust. First, a descriptive statistical analysis of the dataset was performed to analyze the representativeness of the sample and to extract insights. To address the research questions, ordinal random effect regression models were considered.

Contrary to the authors' expectations, the voluntary implementation of an IAD had no influence on the audit report type. However, when the authors refined the approach to include the robustness of the IAD, it became clear that this variable does influence the report issued by the external auditor.

This paper contributes to the current literature by determining the effects of the robustness of IADs on municipality audit reports. As far as the authors know, this paper is novel. Since auditing plays an important role in the transparency of public financial statements and in promoting equity, this study shows that a robust IAD is an advantage in the pursuit of these goals.

This study aims to examine the extent to which external auditors (EAs) use the work of the internal audit function (IAF) based on the purpose of its primary activities. The authors rely on attribution theory, which suggests that individuals search for meaning when an event occurs. In this setting, the authors explore how the overall (assurance vs advisory) or specific (e.g. risk management and evaluating internal controls) focus of IAF activities influences perceived EA reliance on the IAF’s work.

The authors first explore the research question with data extracted from a broad, longitudinal survey conducted triennially by the national chapters of the Institute of Internal Auditors in Austria, Germany and Switzerland. The data includes responses from 2014, 2017 and 2020 administrations of the survey. The authors conduct a parallel survey with practicing EAs attending two training sessions of a European office of a global network firm. Hypotheses were tested using ordered logistic regression.

Among the chief audit executive (CAE) participants, the authors observe that a balanced or primarily assurance-related purpose of the IAF, relative to a primarily advisory-related purpose, is associated with higher perceived EA reliance. The authors observe similar perceptions of the extent of reliance among the EA participants.

With a unique data set of practicing internal auditors from three countries, coupled with a sample of EAs, to the best of the authors’ knowledge, this study is the first to examine differences in EA reliance across the IAF’s primary roles. The study relies on data from three European countries, which differs from prior EA reliance literature with a largely North American focus. Further, comparison between perceptions of EAs and CAEs is a novel approach and this paper’s findings suggest that perceptions of CAEs could be a reliable proxy for EA-intended behavior.