Degree Granting Department
Dahlia Robinson, Ph.D.
Janene Culumber, DBA
Chris Pantzalis, Ph.D.
Robert Hammond, DBA
Mohamad Ali Hasbini, DBA
audit committee, audit mandate, board, board structure, IIA Standards
Independence is a critical foundation of all internal audit functions and internal audit services. The Institute of Internal Auditors (IIA) sets The International Standards for Professional Practice of Internal Auditing, which requires that internal audit functions maintain independence, and chief audit executives functionally report to the “board.” The term “board” is interpreted differently in different countries due to the country’s governance models. The diverse corporate governance models create different board structures and the CAE’s reporting relationship with the board. Additionally, the lack of regulatory mandate about internal audit created a reality that internal audit functions are positioned differently depending on organizations. Through this research, I plan to compare the three typical corporate governance models and investigate how each model impacts internal audit independence, and how internal audit independence is reflected in the actual audit practices.
I utilized the data from the recent global internal audit survey and selected the five representative countries - Austria, China, Germany, Japan, and the U.S. The criteria to evaluate internal audit independence are drawn from the IIA’s Standards. This study reveals that internal audit functions do not conform to the IIA's independence requirements. We conclude that the governance factors, specifically the board structure, has a significant effect on both internal audit independence and related audit practices. This is the first research that extends the understanding of the impact of corporate governance on internal auditing.
Scholar Commons Citation
Bi, Lily, "The Complexity of Governance and Internal Audit Independence" (2019). USF Tampa Graduate Theses and Dissertations.