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A synthesis of empirical internal audit effectiveness literature pointing to new research opportunities

23 May

This co-authored paper with Ulrich Hahn was accepted for publication in the Managerial Auditing Journal in January 2014 (forthcoming in MAJ first edition 2015).

Purpose – Ten years after Bailey, Gramling and Ramamoorti (2003) presented research opportunities in Internal Audit (IA) this paper provides a synopsis of what academic literature says about IA effectiveness. A new set of research questions that may help to bring the best out of IA is proposed.

Design/methodology/approach – Empirical studies based on internal auditors’ self-assessments (“inside-out”) and empirical studies based on other stakeholders’ perspectives (“outside-in”) are reviewed through an “effectiveness lens”. The “outside-in” perspective is regarded as particularly valuable.

Findings – First, we identify common themes in the empirical literature. Second, we synthesize the main threads into a model comprising macro and micro factors that influence IA effectiveness. Third, we derive promising future research paths that may enhance IA’s value proposition.

Practical implications – The “outside-in” perspective indicates a disposition to stakeholders’ disappointment in IA: IA is either running a risk of marginalization (IIA, 2013; PWC, 2013) or has to embrace the challenge to emerge as a recognized and stronger profession. The suggested research agenda identifies empirical research threads that can help IA practitioners to make a difference for their organization, be recognized, respected and trusted, and help the IA profession in its pursuit of creating a unique identity. This paper wishes to motivate researchers to explore innovative research strategies and probing new theories as well as benefitting from cross-fertilization with other research streams.

Originality/value – This paper summarizes the state of research on IA effectiveness and proposes a guide for future IA research. It provides pointed questions that may further advance the understanding of what constitutes IA and how IA can enhance its value proposition.

Keywords – Internal audit, effectiveness, positioning, relevance, profession, relationship, board, stakeholder, new research opportunities

Paper type – Literature review, conceptual paper

Thank you for 710 downloads in less than one year

22 Jul

Last year in September, my co-authored article ‘Reflections on the Internal Auditing Profession: What might have gone wrong?’ was published in Managerial Auditing Journal. Since then this article has been downloaded 710 times. Thank you.

Lenz, Rainer and Sarens, Gerrit (2012), Reflections on the Internal Auditing Profession: What might have gone wrong? Managerial Auditing Journal, Volume 27 No. 6, pp. 532-549

Winner of the Larry Sawyer Research Award of 2012 (IIA Research Foundation, U.S.)