This paper deals with recent developments in auditing, taking KPMG's 'business measurement process' as its example. From this example it is discussed how and why auditing is currently being 'reinvented'. The 'reinvention' of auditing, it is argued, represents a fundamental break with the established epistemological dualism between auditing and management advisory services,1 that is central to most literature on auditor independence, including the European Commission's Green Paper. Consequently, it is not only auditing that is being reinvented, it is also consulting and independence, and the consequences of this rupture are finally discussed. The paper concludes that the auditor cannot be independent because auditing is no longer independent.
* This version of the article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process, which may lead to differences between this version and the publisher's final version AKA Version of Record.
For decades, the Institute of Internal Auditors has promoted the professionalization of internal auditing. Prior research on the subject has focused mainly on the achievement of professional characteristics as an indicator of the degree of professionalism. The results seem to vary suggesting that focus should be on exploring the contextual dependency of the professionalization of internal auditing. Based on a case study of Danish internal auditing, this paper analyzes the process of professionalization through the lenses of Abbott's theory of the system of professions. From this perspective, the process of professionalization is driven by inter-professional competition with the external audit profession over the internal audit jurisdiction. The results indicate that in the Danish case external auditing has maintained an intellectual jurisdiction over internal auditing by controlling its knowledge base, thus preventing Danish internal auditing from obtaining a distinct jurisdiction of its own.
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.
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