A Synthesis of Empirical Internal Audit Effectiveness Literature Pointing to New Research Opportunities

Rainer Lenz, Ulrich Hahn (2015), A synthesis of empirical internal audit effectiveness literature pointing to new research opportunities, Managerial Auditing Journal, Vol. 30 Iss: 1, pp. 5-33

Posted: 21 Dec 2014 Last revised: 12 Mar 2016

See all articles by Rainer Lenz

Rainer Lenz

Louvain School of Management (UCL)

Ulrich Hahn

Frankfurt University of Applied Sciences

Date Written: 2015

Abstract

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, assurance

JEL Classification: M10, M20, M40

Suggested Citation

Lenz, Rainer and Hahn, Ulrich, A Synthesis of Empirical Internal Audit Effectiveness Literature Pointing to New Research Opportunities (2015). Rainer Lenz, Ulrich Hahn (2015), A synthesis of empirical internal audit effectiveness literature pointing to new research opportunities, Managerial Auditing Journal, Vol. 30 Iss: 1, pp. 5-33, Available at SSRN: https://ssrn.com/abstract=2540871

Rainer Lenz (Contact Author)

Louvain School of Management (UCL) ( email )

Place des Doyens 1
Louvain-la-Neuve, 1348
Belgium

Ulrich Hahn

Frankfurt University of Applied Sciences ( email )

Nibelungenplatz 1
Frankfurt / Main, 60318
Germany

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