Articles

Internal Audit Effectiveness: Multiple Case Study Research Involving Chief Audit Executives and Senior Management

R. LENZ, G. SARENS, F. HOOS

The EDP Audit, Control, and Security Newsletter

2017, vol. 55, n°1, pp.1-17

Départements : Comptabilité et Contrôle de Gestion

https://www.tandfonline.com/doi/abs/10.1080/07366981.2017.1278980


The focus of this study is the relationship between chief audit executives (CAEs) and senior management (SM) and its relationship with internal audit (IA) effectiveness. The study reveals differences between more and less effective IA functions and offers explanations by studying organizational, personal, and interpersonal factors within the German corporate governance context. The findings show that the pattern of interaction between CAEs and SM is a key determinant of IA effectiveness. This study highlights the danger of viewing customer satisfaction as the key measure of IA effectiveness since in practice expectations can vary significantly and as sometimes very little may be demanded. Moreover, CAEs typically adjust to expectations, upward and downward. CAEs can drive the agenda as well. When it comes to personality factors, “Fingerspitzengefühl” and swimming in the organization characterize the successful internal auditor. IA designations for CAEs were not found to be of added value. At the organizational level, the findings show that companies that are considered as “hidden champions” demand and benefit from effective IA practices


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