Drivers of stakeholders’ view of internal audit effectiveness: Management versus audit committee

Abstract

Purpose

The purpose of this study is to determine the differences in perception of the key stakeholders on the drivers of internal audit effectiveness, namely, senior management and the audit committee, in relation to identified measures. To be seen as an effective internal audit function, value needs to be added for both these stakeholders. It is thus important for internal auditing to obtain an understanding of what these stakeholders respectively perceive as the most prominent drivers of internal audit effectiveness.

Design/methodology/approach

Heads of internal audit functions (providing insight into the drivers), chairpersons of audit committees and senior management (providing insight into the measures) within the South African public sector responded to a survey. The data were subjected to an exploratory factor analysis and principal component analysis to reduce the set of items and to provide continuous scores for use in a multivariate multiple regression analyses.

Findings

Senior management and the audit committee differ in their level or order of prominence of the identified drivers that influence the identified measures of internal audit effectiveness. No statistical similarities in their level of views could be found.

Originality/value

To enhance the effectiveness of internal auditing, the internal audit functions should take cognisance of the difference in perceptions of its key stakeholders on the drivers of internal audit effectiveness, in relation to identified measures, to manage these relationships. No previous research could find that statistically compared views of senior management and the audit committee regarding the drivers of internal audit effectiveness.

Citation

Erasmus, L. and Coetzee, P. (2018), "Drivers of stakeholders’ view of internal audit effectiveness: Management versus audit committee", Managerial Auditing Journal, Vol. 33 No. 1, pp. 90-114. https://doi.org/10.1108/MAJ-05-2017-1558