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Accountability structures and management relationships of internal audit : an Australian study

Leung, Philomena, Cooper, Barry J. and Perera, Luckmika 2011, Accountability structures and management relationships of internal audit : an Australian study, Managerial auditing journal, vol. 26, no. 9, pp. 794-816.

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Title Accountability structures and management relationships of internal audit : an Australian study
Author(s) Leung, Philomena
Cooper, Barry J.
Perera, Luckmika
Journal name Managerial auditing journal
Volume number 26
Issue number 9
Start page 794
End page 816
Total pages 23
Publisher Emerald Group Publishing Ltd.
Place of publication Bingley, England
Publication date 2011
ISSN 0268-6902
1758-7735
Keyword(s) Internal auditing
Accountability structures
Management relationships
Corporate governance
Summary Purpose – The purpose of this study is to examine the accountability structures and the management relationships of internal audit. In particular, related issues such as the predominant internal audit objectives and the related functions, the extent to which internal audit addresses any financial reporting risks and the manner in which internal auditors in Australia perform their tasks, are identified. The study also looks at the extent of compliance with the Institute of Internal Auditors (IIA) Standards.
Design/methodology/approach – Based on a survey of the chief audit executives in Australia, the study identifies the reporting mechanisms, functions and relationships of internal audit, including the contributions made towards good corporate governance. There is, however, some misalignment between the aspirations of internal auditors and their relationships with management.
Findings – While internal audit objectives have been established with a focus on controls, risks and governance, the study has highlighted the fact that there is a lack of correlation between the tasks performed by internal auditors and the important internal audit objectives, with the exception of internal control and risks. The results also suggest that internal auditors have been providing an internal consulting and advisory role in matters concerning IT systems, strategic risks and financial issues. If internal auditors are to proactively contribute to good corporate governance, they need to define how, and in what way, this can be done. In regard to corporate governance processes, the results of the research indicate that issues surrounding internal control, risk assessment and management processes are regarded as the key factors for internal audit to contribute to good corporate governance.
Originality/value – This study complements and contributes to the existing literature in providing insights into the evolving role of the internal audit function in terms of accountabilities and relationships with management. It also provides a valuable insight into how the internal audit profession can build upon its inherent strengths and address any apparent areas of concern. This will assist both the profession and policy makers alike, in better understanding and improving the role of the internal audit process.
Notes Reproduced with the kind permission of the copyright owner.
Language eng
Field of Research 150102 Auditing and Accountability
Socio Economic Objective 970115 Expanding Knowledge in Commerce, Management, Tourism and Services
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2011, Emerald Group Publishing Ltd.
Persistent URL http://hdl.handle.net/10536/DRO/DU:30040171

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Every reasonable effort has been made to ensure that permission has been obtained for items included in DRO. If you believe that your rights have been infringed by this repository, please contact drosupport@deakin.edu.au.