The Role of The Internal Audit Function in Corporate Governance: A Synthesis of The Extant Internal Auditing Literature and Directions for Future Research  

Oleh:

Gramling, Audrey A. ; Maletta, Mario J. ; Schneider, Arnold ; Church, Bryan K.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: Journal of Accounting Literature vol. 2004 no. 23 (2004), page 194-244.
Topik: Public Sector Accounting; PSA; Internal Audit Function; IAF; Corporate Governance
Fulltext: JAL 04 23 194.pdf (4.43MB)

Isi artikel

Extant internal auditing literature is extensive, and provides useful in-sights into the current and potential roles of the internal audit function (IAF) in corporate governance. Our objective herein is to synthesize literature on internal auditing to guide future thinking and research on the new and expanding roles that the IAF can play in helping ensure quality corporate governance. To organize our review we adopt the perspective that corporate governance is comprised of four cornerstones: the external auditor, the audit committee, management, and the IAF [Institute of Internal Auditors (II A), 2003 a]. We then focus on the IAF "cornerstone" and how the IAF can contribute to corporate governance through its relationships with the other three corporate governance parties. More specifically, we adopt a perspective that the IAF serves as a resource to each of the other three parties responsible for corporate governance. As part of that perspective, we recognize that the nature and value of the IAF as that resource are contingent on the quality of the IAF. Accordingly, we begin our synthesis of the literature by focusing on the internal auditing literature related to IAF quality, and then examine the literature on the important three IAF corporate governance relationships. In the next section, we discuss the four-cornerstones corporate governance framework, including the role of the IAF. As part of that discussion we describe extant professional guidance and best practices on IAF quality and on the relationships between the IAF and the other three parties responsible for governance. The descriptions of IAF quality and the IAF relationships provide a framework for the literature synthesis we present in section three. Our final section provides a discussion of future research directions.

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