The Impact on the Role, Position, and Scope of Services of the Internal Audit Function
Corporate scandals during the last decade fostered many Corporate Governance reports. These reports aimed at restoring checks and balances in companies to prevent fraudulent behaviour and restore public trust. One of the functions active in many organizations is Internal Audit. This function operates under the umbrella of the Management Board and is geared towards monitoring lower level management. Due to the Corporate Governance reports the interest in the work of internal auditors has increased. In many reports special attention is paid to this function. The Supervisory Board and the Audit Committee are required to oversee the activities and results of external as well as internal auditors. Furthermore, regulators are also keen on the results of their work. The aim of this study was to research the impact of Corporate Governance reports on the role, position, and scope of services of the Internal Audit Function. Agency Theory and Transaction Cost Economics were applied to further theory around internal auditing. Information asymmetry and asset specificity were used to test whether there was a correlation between high scores on information asymmetry and/or asset specificity for the organization and the size of an Internal Audit Function, the ‘make or buy’ issue, or its scope of services. Results showed that such was the case for the size but not for the ‘make or buy issue or the scope of services. Furthermore, this study contains descriptive characteristics of internal audit functions.
- Verlag: ERIM - Erasmus Research Institute of Management
- Erschienen 2007
- Taschenbuch: 317 Seiten
- Sprache: English
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