Is the objectivity of internal audit compromised when the internal audit function is a management training ground?

Rotational internal audit programs and financial reporting quality: Do compensating controls help?

“…This practice is somewhat perplexing given evidence from prior research suggesting it diminishes internal auditors' objectivity (Messier, Reynolds, Simon, & Wood, 2011;Rose, Rose, & Norman, 2013). We extend prior research on the effects of systematically rotating internal auditors into operational management by conducting interviews with chief audit executives and audit committee chairpersons to develop an initial framework of how this practice is thought to impact financial reporting outcomes.…”

Incentives for Dishonesty: An Experimental Study with Internal Auditors

“…4 Only the best and overperforming internal auditors will be promoted into promising positions, while underperforming auditors will stay for a longer period in the internal audit functions or will never get a promotion. Findings show that, especially in this arrangement, a loss of objectivity (Hoos et al, 2014;Rose et al, 2013) and efficiency (Anderson et al, 2012) can be identified.…”

Independence and Objectivity of Internal Auditors as Determinants of Their Effectiveness

“…"springboard" for higher management positions. Research by Goodwin and Yeo (2001) shows that 43% of respondents, chief audit executives in enterprises in Singapore, confirm the practice, while in the US, the situation is such in more than half of publicly listed companies (Rose et al, 2013). Also, research by Christopher et al (2009) shows that 56% of internal auditors in Australian companies believe that the appointment of internal auditors to higher managerial positions is, in fact, a reflection of the business culture.…”

“…More specifically, it is a reasonable assumption that internal auditors will, to some extent, be biased in carrying out their activities, bearing in mind that the audited entity has concrete plans to develop their careers. Independence and objectivity is surely brought into question as a result of internal auditors' desire "not to compromise their relationship with the counterparts and not to be characterized as unreliable and untrustworthy colleagues" (Rose et al, 2013(Rose et al, , p. 1008. In addition, internal auditors hoping or expecting to move to senior management functions are not sufficiently interested to adequately carry out their activities and show no initiative to improve audit quality.…”