Archive | August, 2018

In Search of a Measure of Effectiveness for Internal Audit Functions: An Institutional Perspective

25 Aug

Lenz, R., Sarens, G. & Jeppesen, K.K. (2018): In Search of a Measure of Effectiveness for Internal Audit Functions: An Institutional Perspective, EDPACS [Forthcoming]



Internal auditing (IA) effectiveness is still viewed, to large extent, as a ‘black box’ in academic research. In this paper, relevant empirical studies based on self-assessments of internal auditors and on other stakeholders’ perspectives are reviewed through an ‘effectiveness lens’. Major patterns are identified in the existing literature, and the paper complements the work of Gramling et al. (2004), who examined the literature related to IA quality, largely from the viewpoint of external auditors. This paper reviews the empirical literature on IA effectiveness that has been published since the latest revision of the IA definition in 1999, using the perspectives of new institutional theory and institutional entrepreneurship (DiMaggio and Powell, 1983; DiMaggio, 1988) as a framework, thereby recognizing the tension between institutional forces and the role of agency. In cases where isomorphic forces are in conflict with other organizational demands, chief auditing executives (CAE) agency can be a solution that enables local adaptation (institutional entrepreneurship). The ability to exploit fully the potential of agency is an opportunity for the CAE to tailor and advance the role of IA in its specific organizational context.


Key words: Internal auditing, effectiveness, new institutional theory, institutional entrepreneurship