Internal audit function in the Croatian hospitality industry

Vlašić Dubravka () and Laganis Karmen Paolić
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Vlašić Dubravka: PhD Faculty of tourism and hospitality management, Primorska 46, 51410 Opatija, Croatia
Laganis Karmen Paolić: mag.oec., CIA, MBA, business advisor Umag, Croatia

WSB Journal of Business and Finance, 2023, vol. 57, issue 1, 53-65

Abstract: Purpose – This study aims to examine the current state-of-the-art foundation, organization, role, processes, and functioning of internal audit (IA) within Croatian hotel companies in order to suggest improvements. Design/Methodology –qualitative research was conducted using a questionnaire distributed to Croatian hotel companies that quote their stocks on the capital markets, noted destinations, and internationally renowned hotel companies that operate in Croatia from March to May 2023. Based on the responses received, semi-structured interviews were conducted with internal auditors who are or have been employed by hotel companies in order to obtain more detailed information about the organization and performance of the internal audit function (IAF). Findings – The results showed that not many hotel companies in Croatia have organized IAF because it is not a legal obligation for the hospitality industry. The current stage of IAF in these companies is infrastructural or integrated, which shows possibilities for its improvement. The role of internal audit is not recognized because it is seen as a time-consuming activity and an additional expense for the hotel company, without awareness of its real purpose, opportunities to improve the efficiency and effectiveness of hotel operations, and other benefits of this function. Research limitations – the small sample of hotel companies that have IAF organized within and also a limited number of internal auditors that have experience, knowledge, and qualifications to work in the hospitality industry. The originality of the research – the first study regarding the organization of IAF in the hospitality industry.

Keywords: internal auditing; internal auditor; internal audit function; hospitality industry; hotel companies (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:wsbjbf:v:57:y:2023:i:1:p:53-65:n:1007

DOI: 10.2478/wsbjbf-2023-0007

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