Internal audit involvement in enterprise risk management

de Zwaan, Laura, Stewart, Jenny, & Subramaniam, Nava (2011) Internal audit involvement in enterprise risk management. Managerial Auditing Journal, 26(7), pp. 586-604.

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Abstract

Purpose

The paper examines 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 (i) the internal auditor’s involvement in ERM and (ii) 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.

Impact and interest:

14 citations in Scopus
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ID Code: 69998
Item Type: Journal Article
Refereed: Yes
Additional Information: Dr Laura de Zwaan is a new academic staff who commenced at the School of Accountancy in 2014. This publication identifies her from previous University.
Keywords: Australia, Public sector, Private sector, Internal auditing, Enterprise risk management, Audit committees
DOI: 10.1108/02686901111151323
ISSN: 0268-6902
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Copyright Owner: Copyright 2011 Emerald Group Publishing Inc
Deposited On: 09 Apr 2014 22:34
Last Modified: 21 Jun 2017 18:36

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