Purpose – The purpose of this paper is to investigate how the internal audit can contribute to an improvement in business performance. The goal is to develop a theoretical model of the integration of quality management systems (QMS) and an internal audit within a broader managerial system and performance reviews of the company. Design/methodology/approach – A theoretical framework was developed for assessing the internal audit's contribution to the achievement of business goals. Based on the theoretically explained relationship two hypotheses related to impact of internal audits on business performance were empirically tested by a case study. Findings – A mature QMS should contribute to the achievement of a company's efficiency, which can be based on the connection of quality goals with the company's strategic goals, and in relation to this implementation of the internal audit should also be upgraded to contribute to achievement of the company's efficiency and strategic goals. Accordingly, the results of internal audits and measures that follow the audit are discussed within a strategic internal analysis of the company. Research limitations/implications – Testing on a single case has limitations regarding the ability to generalise the results to a broader spectrum of companies, however the objective was to expand and generalise theory. With the confirmed hypothesis about the contribution and positive impact of the internal audit by the case study, the statistical generalisation by using the survey method represents a logical additional step. Further research should also analyse the relationship between subjective employee assessments and objective performance data. Practical implications – Empirical results show that internal audit contributes to the achievement of business goals and that internal audit has more positive than negative effects on business performance. Therefore, the paper demonstrates that the results of an audit can be used as a foundation for choosing measures not only to assure the conformity of the QMS with the standard's requirements, but also to assure business improvements. Originality/value – The paper identified the relations between three managerial systems: QMS, total quality management (TQM) (represented by the business excellence models) and strategic management. The systems are connected in the strategy development and in the analysis phase of the strategic decision‐making process. Paper integrated the internal audit into the company's performance review system. The identified positive effects of the QMS were used as a basis for assessing the internal audit's contribution to the achievement of business goals and improving company efficiency.
International Journal of Quality & Reliability Management – Emerald Publishing
Published: Sep 7, 2010
Keywords: ISO 9000 series; Internal auditing; Business performance