Internal audit involvement in enterprise risk management

de Zwaan, Laura, Stewart, Jenny and Subramaniam, Nava 2011, Internal audit involvement in enterprise risk management, Managerial auditing journal, vol. 26, no. 7, Special Issue : Risk management, governance and assurance, pp. 586-604.

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Title Internal audit involvement in enterprise risk management
Author(s) de Zwaan, Laura
Stewart, Jenny
Subramaniam, Nava
Journal name Managerial auditing journal
Volume number 26
Issue number 7
Season Special Issue : Risk management, governance and assurance
Start page 586
End page 604
Publisher Emerald Group Publishing
Place of publication Bingley, England
Publication date 2011
ISSN 0268-6902
1758-7735
Keyword(s) Australia
Public sector
Private sector
Internal auditing
Enterprise risk management
Audit committees
Summary Purpose – The purpose of this paper is to examine the impact of internal auditors’ involvement in enterprise risk management (ERM) on perceptions of their willingness to report a breakdown in risk procedures and whether a strong relationship with the audit committee affects such willingness to report. The study also investigates the use of ERM and the role of internal audit in ERM in Australian private and public sector entities.
Design/methodology/approach – The study uses an experimental design, manipulating the internal auditor’s involvement in ERM and the strength of the relationship between internal audit and the audit committee. Participants are 117 certified internal auditors. The study also gathers descriptive data on the use of ERM.
Findings – The study indicates that a high involvement in ERM impacts the perceptions of internal
auditors’ willingness to report a breakdown in risk procedures to the audit committee. However, a strong relationship with the audit committee does not appear to affect their perceived willingness to report. The study also finds that the majority of organisations have recently adopted ERM. Internal auditors are involved in ERM assurance activities but some also engage in activities that could compromise objectivity.
Research limitations/implications – There are internal and external validity threats associated with the experimental design.
Practical implications – The findings reinforce the need for organisations to adhere to the recommendations of the Institute of Internal Auditors and to ensure that internal auditors do not play an inappropriate role in ERM.
Originality/value – The paper contributes to our understanding of the impact of involvement in ERM on internal audit objectivity and of the current role of internal audit in ERM in Australia.
Language eng
Field of Research 150199 Accounting, Auditing and Accountability not elsewhere classified
Socio Economic Objective 899999 Information and Communication Services not elsewhere classified
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2011, Emerald Group Publishing Limited
Persistent URL http://hdl.handle.net/10536/DRO/DU:30036767

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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