Antecedents and organisational performance implications of internal audit effectiveness

Dessalegn Getie Mihret, Kieran James and Joseph M. Mula

Pacific Accounting Review, 2010, vol. 22, issue 3, 224-252

Abstract: Purpose - The purpose of this paper is to synthesize relevant theoretical and empirical literature to develop propositions and suggest a research agenda on the antecedents and organisational performance implications of internal audit effectiveness. Design/methodology/approach - The paper employs institutional theory and Karl Marx's theory of the “circuit of industrial capital” to synthesize relevant internal audit literature to develop theoretically justifiable propositions and highlight an operational research agenda. Findings - Propositions and a research agenda are provided on potential antecedents of internal audit effectiveness and its possible association with company performance measured as rate of return on capital employed. Also, key variables are identified and operationalisation issues discussed. Originality/value - As the extant literature does not provide a canon of internal audit effectiveness, the paper's originality is its argument that a positive association between compliance with standards for the professional practice of internal auditors and organisational goal achievement could serve as an approach to assess internal audit effectiveness. Furthermore, the use of the two theories in combination provides additional insights into identifying the antecedents of internal audit effectiveness and its measurement.

Keywords: Internal auditing; Organizational performance; Corporate governance; Marxist economics (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:eme:parpps:01140581011091684

DOI: 10.1108/01140581011091684

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