Internal auditor communications: an experimental investigation of managerial perceptions

Abstract

Purpose The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement. Design/methodology/approach The experiment involved a 2 × 2 × 2 design with internal auditor gender, mode of communication and root cause variables randomly assigned to 228 experienced managers. Findings When the internal auditor includes a root cause for an identified deficiency in an internal audit report, management perceptions of the quality of that report improve. The gender of the internal auditor who communicates the audit finding with management does not significantly impact management’s perceptions. Additionally, communicating the internal audit report via e-mail instead of videoconference results in improved managerial perceptions of the quality of the internal auditor. While improvements in perceptions of internal auditor quality lead to greater agreement with internal auditor recommendations, improvements in perceptions of report quality lead to greater implementation of internal-auditor-recommended remediation strategies. Research limitations/implications The operationalization of the manipulated variables of interest (communication mode, gender and root cause) may limit the generalizability of the study’s results. Practical implications The paper includes managerial implications for internal auditors’ choice of communication mode and inclusion of a root cause in interim internal audit reports. Originality/value This study provides evidence on the factors that could improve management’s perceptions of internal auditors’ work. The findings can help organizations, such as the Institute of Internal Auditors, to better understand how to address the needs of those who communicate with internal auditors.

Effects of external and internal drivers of individual behavior voice on the moral courage and internal auditors’ effectiveness

“…In other words, if the internal auditor has a mutual understanding of the company's financial strategies, he/she can play a more effective role in preventing deviations from the financial statements. Farkas et al (2019) conducted a study entitled "Internal auditor's communications: An experimental investigation of management perception" using a 2 Â 2 Â 2 matrix and two control and experimental groups. According to the findings, gender differences in internal auditing make interaction with management be different, so that female internal auditors revealed more concerns and sensitivity to disclose information; however, men may engage in behind-the-scenes relations with management.…”

The role of stakeholders' perception in internal audit status: the case of Iran

“…In the European context (Austria, Germany, and Switzerland), findings imply that audit committees are interested in risk management part of IA and executive management teams are interested in internal control reports (Eulerich et al , 2019). Research in the US market (Steinbart et al , 2013; Farkas et al , 2019) suggests that the perceptions of information security professionals about IA depend on the relationship between the two departments and can be improved by more IT training for internal auditors (Steinbart et al , 2013). The methods of communication and reporting also affect the managers' perception about internal audit (Farkas et al , 2019).…”

“…Research in the US market (Steinbart et al , 2013; Farkas et al , 2019) suggests that the perceptions of information security professionals about IA depend on the relationship between the two departments and can be improved by more IT training for internal auditors (Steinbart et al , 2013). The methods of communication and reporting also affect the managers' perception about internal audit (Farkas et al , 2019). Roussy and Brivot's (2016) study in Canada reveals that internal auditors understand their roles as “managers” and “eminence”, while audit committee members perceive them as private consultants, the Institute of internal auditors' treat them as “professionals”, and finally external auditors regard them as “watchdogs”.…”

Reorentasi Audit Internal Untuk Melawan Korupsi Pengadaan

“…Berangkat dari keprihatinan terhadap maraknya kasus korupsi di dunia, terdapat penelitian yang menumbuhkan kembali semangat pada Auditor internal untuk memperkuat internal control organisasi. Seperti Farkas, Hirsch, & Kokina (2019) Bukan hanya di lini korupsi pengadaan, melainkan yang ada kaitannya dengan "uang rakyat" perlu penegakan integritas kejujuran dalam pengelolaannya. Pemberantasan korupsi bukan sekadar berupa kesepakatan yang berada pada level kebijakan.…”

“…Transformasi peran auditor internal penting ke depannya untuk menjunjung sikap integritas dan kapabilitas yang ting-gi demi tercapainya tujuan organisasi (Endaya & Hanefah, 2016;Farkas, Hirsch, & Kokina, 2019). Dalam sektor pemerintahan, fungsi auditor internal dalam memberikan assurance seharusnya mengalami evolusi perkembangan seperti di lingkungan bisnis.…”