Search results

The purpose of this study is to propose a framework for the evaluation of the perceived value internal audit functions add to their organisations. The framework is based on service quality measurement principles, specifically SERVPERF, which is applied to internal auditing.

Insights obtained from the literature on internal auditing and service quality disciplines were synthesised to identify and structure value-adding attributes of internal auditing. A thematic analysis of published profiles (by Protiviti) of various organisations’ internal audit functions were analysed and evaluated against those attributes identified in the literature to formulate an evaluation framework based on service quality measurement principles.

The identified value-adding attributes were categorised according to the dimensions of the SERVPERF service quality measurement instrument to formulate a framework for evaluation of the value added by internal audit functions. It was found that the SERVPERF dimensions appear to be relevant to internal auditing. The SERVPERF instrument was therefore adapted to evaluate the value added by internal auditing as a service.

This paper contributes to both the theory and practice of internal auditing by proposing formal dimensions of a value-adding internal audit service which can then serve as a reference point from which to evaluate the value added to an organisation. The framework can serve as a starting point for internal audit functions to develop their service offering and/or form the foundation of stakeholder satisfaction surveys.

The study contributes to the literature by applying service quality principles to internal auditing. A holistic framework that can be used for the evaluation of the value added by internal audit functions based on stakeholder perceptions is proposed. The framework juxtaposes attributes of value-adding internal auditing with recognised service quality performance measures. The notion of value added is investigated to better understand the concept in the context of internal auditing services.

The purpose of this paper is to draw inferences – from the results of an Ethiopian public sector corporation (for‐profit) case study – on how the attributes of a value‐adding internal audit department would vary among organisations.

The case study strategy is employed. The internal audit function of a public sector corporation was examined using an analytical framework derived from the literature. Research evidence was gathered distributing questionnaires to managers and internal auditors, conducting a semi‐structured interview with the internal audit department manager, and reviewing documents.

The results highlight that traditional/compliance audit is dominant in the organisation studied as contrasted with value‐added auditing. The paper concludes that goals and strategies pursued and the level of risk faced by organisations to which internal audit provides service, appear to shape the attributes of a value‐adding internal audit department. The study also demonstrates that the quality of strategic planning for, and marketing of, internal audit would influence the extent to which an appropriate value‐added profile is attained in a particular context.

Since a single unit of analysis is examined, universal generalisability of the findings cannot be claimed. Also, the research design assumed that the unit of analysis investigated falls within the scope of internal audit departments considered in the literature that served as a basis to develop the analytical framework and data collection instruments.

The paper is expected to inspire conclusive follow‐on research on the role of internal audit in Ethiopia, or other countries with similar settings.

The purpose of this paper is to determine if self-serving bias affects audit client satisfaction level with their audit firm.

A 2×2 between-subjects design is used, where the authors experimentally manipulate the level of client involvement in the audit and the extent of value-added services the client received.

Using a sample of 115 financial managers (audit clients), the authors find no evidence that self-serving bias exists among clients in the experimental setting. Rather, they find that clients appear to be more satisfied with their auditor when they (clients) participate more in the service exchange.

The research is limited to a specific context within the privately held company audit setting.

Audit firms may consider encouraging their privately held clients to participate more in the audit process by clearly communicating expectations and providing clients with audit preparedness materials, including templates and training where necessary.

Although the self-serving bias has been shown to exist in the marketing literature, the authors present a setting where the relationship between service provider (auditor) and customer (client) is such that the self-serving bias may not hold.

The new definition of internal auditing defines the function as an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. The purpose of this paper is to summarize an assessment of this new definition obtained through structured interviews from 11 internal audit directors of large publicly traded companies. The responses from the directors indicate that there are wide differences in viewpoints and objectives; but a definite shift has occurred in the overall scope of internal audit towards operational activities. While most of the interviewees are in conceptual agreement with the new internal audit definition, an underlying warning is vocalized: “Don’t throw out the franchise”. That is, the traditional role of the internal auditor should not be completely abandoned. These, along with other responses pertaining to related issues and suggestions for future research, are summarized throughout the paper.

This study provides insights into the meanings given to audit quality (AQ) by audit partners responsible for delivering audit services. It explores the influence of contextual factors in the auditing setting on constructing such meanings and its representations.

Drawing on a symbolic-interactionist framework, this study takes an interpretive approach, employing semi-structured interviews with audit partners from the United Kingdom (UK).

Three primary meanings of AQ are identified. First, in contradiction to that offered by “mainstream” AQ research, audit partners in this study predominantly regarded the meaning of AQ as an economic concept in the context of the “business” of auditing, delivering the service quality (e.g. value-added auditing and value-for-money) that is expected by their audit clients. Second, the audit partners also espouse the meaning of AQ to be “fit for purpose” audit documentation and adherence to quality control that meets the standards of compliance demanded by independent audit inspections. Third, and similar to the classic convention of AQ, audit partners consider “inputs” to AQ, attributes related to individual auditors (e.g. qualifications, experience and training) as one of the key AQ meanings. A range of stimuli underlies AQ meaning construction, including the audit firm's commercial interests, legitimacy, image management and social identity resulting from audit partners' interactions with audit clients, regulators, and their own self-reflexivity. Interestingly, this study identifies a considerable potential conflict between the meanings assigned to AQ, which suggests that auditors are struggling to strike a balance between the competing demands of those meanings.

This exploratory study addresses only the audit partners' perceptions concerning the meaning of AQ. Findings of this study are relevant to auditors and other parties, such as regulators, in addressing competing dimensions of AQ and potential choices involving conduct and content in any individual audit engagement.

The study complements existing research into AQ by exposing the rationales and potential behaviours that underlie commitments to quality by those involved in commissioning audit engagements. It also adds detailed evidence of how contextual factors in the auditing environment interact with auditors' notions of AQ.

This study aims to examine the extent to which switching costs moderates the impact of trust, value and attractiveness of alternatives on client repatronage intentions.

The study combines qualitative and quantitative methodologies to create a cross-sectional survey covering four geographic regions in Thailand. Adopting a contingency perspective, the authors examine the moderating impact of two switching costs (economic and security) on the association among trust, value, attractiveness of alternatives and repatronage intentions.

A study of 519 small- and medium-sized enterprise (SME) clients of audit firms confirms the main effects of trust, value and alternative attractiveness on client retention; some but not all linkages are moderated by the costs of switching.

This article focuses on one specific segment (SMEs) and one category of professional services. It would be worthwhile to extend the findings to larger firms and other professional services.

The study contributes to the understanding of relationship continuance among professional services clients by shifting the focus to when and in which contingency conditions trust, value and attractiveness of alternatives have greater or lesser impacts on repatronage intentions.

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 examines the issue of whether audit quality contracted by issuers at the time of going public is associated with post‐IPO survival. Survival analysis methodology is applied to estimate the probability of post‐IPO time to failure as a function of audit quality. Through estimation of the Cox‐Proportional Hazards models, we find that audit quality is significantly related to post‐IPO time to failure both in isolation and in the presence of other covariates that influence firm survival. Further, the association between audit quality and post‐IPO survival is stronger when investment bank prestige is low.

The sociology of professions literature has theorized that the professions are undergoing a dramatic transformation from being traditional professions to “entrepreneurial professions” populated by “knowledge workers.” In part, this transformation is associated with the commodification and commercialization of professional endeavor.

Our purpose is to enlist the processual ordering perspective to examine the ongoing transformation of the Big 5 (and following the collapse of Arthur Andersen during our field study)/4 public accounting firms to become entrepreneurial firms populated by global knowledge experts. More specifically, we focus on the inter-play of power and meta-power across three moments of the social construction process – externalization, objectivation, and internalization – through which the ethos of entrepreneurialism is being socially constructed within these firms, their individual members, and in the public accounting profession. Finally, we explore impressions gleaned from our qualitative, naturalistic field study.

Prior research finds that auditors can be distinctively committed to multiple workplace targets (e.g., their audit firm, supervisors, profession, and clients). This study investigates an underexamined target of auditor commitment – engagement teams. Given that these teams are responsible for performing key audit tasks for clients and external stakeholders, we argue that auditors' commitment to their team can affect auditor behavior. Using a sample of 121 auditors, our results indicate that quality social exchange relationships between individual auditors and their engagement teams, activated by perceptions of team fairness, and reciprocated with team commitment, are associated with beneficial group-oriented behavior. Specifically, we posit and find that perceived team fairness predicts perceived team support, perceived team support predicts team commitment, and team commitment predicts citizenship behavior directed toward the engagement team (e.g., helping the team by taking on extra responsibilities during an audit). We also find that the social exchange proxies of perceived team support and team commitment sequentially mediate the positive effect of perceived team fairness on team citizenship behavior, and that team commitment is a stronger predictor of team citizenship behavior than auditors' commitment to their firm.