Internal auditors in corporations and ethics

Like Jiang

Chapter 7 in Research Handbook on Accounting and Ethics, 2023, pp 101-115 from Edward Elgar Publishing

Abstract: The internal audit function (IAF) is an important part of corporate governance in modern corporations. It provides both assurance and consulting services to the board of directors and management. Internal auditors thus have a unique position in corporations: they serve two masters who might not have aligned incentives. Such a unique position, in view of the fact that internal audit findings might reflect badly on some individuals (e.g., managers), makes internal auditors particularly vulnerable to ethical dilemmas. This chapter discusses organizational and personal factors that might give rise to ethical pressure faced by internal auditors, the extent of ethical pressure faced by internal auditors based on evidence from worldwide internal auditor surveys, and mechanisms that can help mitigate such pressure. While it is impossible to eliminate ethical pressure faced by internal auditors, the internal auditors’ commitment to ethical conduct is critical for them to add value to corporations.

Keywords: Business and Management; Economics and Finance (search for similar items in EconPapers)
Date: 2023
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