Internal auditors’ perceptions of the function’s ability to investigate fraud

Internal auditors’ perceptions of the function’s ability to investigate fraud PurposeThe purpose of this paper is to examine the relation between internal audit function (IAF) characteristics and organizational variables and IAF’s self-investigation about fraud and irregularities (SIFI) in the French context.Design/methodology/approachThis paper uses the responses of 96 chief audit executives (CAEs) to a global survey of the internal auditing profession carried out by the Institute of Internal Auditors Research Foundation (IIARF) in 2010. A logistic regression model is used to determine factors influencing IAF’s SIFI.FindingsThe authors’ findings reveal that IAF’s SIFI is positively correlated to independence and objectivity, the number of activities performed by the function, adoption of a systematic approach to evaluate the effectiveness of risk management and the size of the company.Research limitations/implicationsThis study examines the factors associated only to IAF’s investigation rather than assessment of the risk of fraud. It remains for future research to analyze determinants those related to internal auditors’ approaches when they evaluate the risk of fraud.Practical implicationsThe findings have implications for CAEs who wish to improve the IAF’s ability to investigate fraud.Originality/valueEven if the IIA has stipulated since 2009 that internal auditors must have knowledge to evaluate the risk of fraud, no disclosure requirement exists, in France, for IAF or its charter. The areas of research related to internal audit behavior in relation to fraud concern fraud risk investigation of financial fraud and management/employee misconduct. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Applied Accounting Research Emerald Publishing

Internal auditors’ perceptions of the function’s ability to investigate fraud

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0967-5426
DOI
10.1108/JAAR-09-2017-0098
Publisher site
See Article on Publisher Site

Abstract

PurposeThe purpose of this paper is to examine the relation between internal audit function (IAF) characteristics and organizational variables and IAF’s self-investigation about fraud and irregularities (SIFI) in the French context.Design/methodology/approachThis paper uses the responses of 96 chief audit executives (CAEs) to a global survey of the internal auditing profession carried out by the Institute of Internal Auditors Research Foundation (IIARF) in 2010. A logistic regression model is used to determine factors influencing IAF’s SIFI.FindingsThe authors’ findings reveal that IAF’s SIFI is positively correlated to independence and objectivity, the number of activities performed by the function, adoption of a systematic approach to evaluate the effectiveness of risk management and the size of the company.Research limitations/implicationsThis study examines the factors associated only to IAF’s investigation rather than assessment of the risk of fraud. It remains for future research to analyze determinants those related to internal auditors’ approaches when they evaluate the risk of fraud.Practical implicationsThe findings have implications for CAEs who wish to improve the IAF’s ability to investigate fraud.Originality/valueEven if the IIA has stipulated since 2009 that internal auditors must have knowledge to evaluate the risk of fraud, no disclosure requirement exists, in France, for IAF or its charter. The areas of research related to internal audit behavior in relation to fraud concern fraud risk investigation of financial fraud and management/employee misconduct.

Journal

Journal of Applied Accounting ResearchEmerald Publishing

Published: May 13, 2019

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