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’ selfassessments (“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.
1. Introduction
A decade ago, Bailey et al. (2003) presented research opportunities in Internal Audit (IA) that helped to advance IA by inspiring a growing academic IA community. Ten years on, this paper provides an overview of what relevant academic literature says about IA effectiveness. Empirical studies based on internal auditors’ self-assessments and empirical studies based on other stakeholders’ perspectives (“outside-in”) are reviewed through an “effectiveness lens”. After identifying common themes, we synthesize the main threads into a model that comprises macro and micro factors that influence IA effectiveness. We then present an updated set of IA research opportunities. These directions for future research constitute the main value of this paper.
5. Summary and conclusions
The motivation of this paper originates in the again perceivable relevancy threat faced by the IA community. A reality check signals ongoing questioning of the IA function’s role and relevance, sometimes even disappointment among IA stakeholders. Thus IA may once again be at a crossroads (IIA, 2013; PWC, 2013): IA is under pressure which may leave it with a weakened impact or it may emerge as a stronger, more recognized profession.
