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Internal auditors’ roles: From watchdogs to helpers and protectors of the top manager

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  • Roussy, Mélanie

Abstract

The purpose of this paper is to understand the governance roles of internal auditors in public sector organizations. An analysis of 42 in-depth semi-structured interviews conducted with experienced internal auditors working in public administration in Quebec indicates that internal auditors perform two key roles: a protector role, further subdivided into two roles, protective shield and keeper of secrets, and a helper role, also subdivided into two roles, support of organizational performance and guide. The analysis also shows that internal auditors have developed a nuanced conception of independence defined as ‘grey independence’ in order to perform their roles. Internal auditors consider that their primary role is to serve the top manager and the organization and that they must prioritize the top manager at the expense of audit committee members. Therefore, this paper contributes to the literature on internal auditor independence. Overall, the findings suggest that internal auditing is not the governance watchdog expected by the regulatory bodies since this is not the role performed by internal auditors.

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  • Roussy, Mélanie, 2013. "Internal auditors’ roles: From watchdogs to helpers and protectors of the top manager," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 24(7), pages 550-571.
    • Handle: RePEc:eee:crpeac:v:24:y:2013:i:7:p:550-571
    DOI: 10.1016/j.cpa.2013.08.004
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    Cited by:

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    5. Like Jiang & Paul André & Chrystelle Richard, 2018. "An international study of internal audit function quality," Accounting and Business Research, Taylor & Francis Journals, vol. 48(3), pages 264-298, April.
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    8. repec:cuf:journl:y:2017:v:18:i:1:moreno-enguix is not listed on IDEAS
    9. Mutiganda, Jean Claude, 2013. "Budgetary governance and accountability in public sector organisations: An institutional and critical realism approach," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 24(7), pages 518-531.
    10. Al Shbail, Mohannad & Salleh, Zalailah & Mohd Nor, M. N., 2018. "Antecedents of burnout and its relationship to internal audit quality," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(4), pages 789-817, August.
    11. English, Linda M., 2013. "The impact of an independent inspectorate on penal governance, performance and accountability: Pressure points and conflict “in the pursuit of an ideal of perfection”," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 24(7), pages 532-549.
    12. Alexander A. Galushkin, 2017. "Organizations of the Sphere of Education and Science Methods of Competitiveness Improvement," European Research Studies Journal, European Research Studies Journal, vol. 0(4B), pages 421-431.
    13. Isabel Z. Wang & Neil Fargher, 2017. "The effects of tone at the top and coordination with external auditors on internal auditors’ fraud risk assessments," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(4), pages 1177-1202, December.
    14. PAula Andreea TERINTE, 2016. "Content Analysis Of Ceo Statement And Auditor`S Recommendation: A Case Study Of Banca Transilvania," Journal of Public Administration, Finance and Law, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 9(9), pages 93-107, June.
    15. Vinnari, Eija & Näsi, Salme, 2013. "Financial and technical competence of municipal board members: Empirical evidence from the water sector," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 24(7), pages 488-501.
    16. Everett, Jeff & Tremblay, Marie-Soleil, 2014. "Ethics and internal audit: Moral will and moral skill in a heteronomous field," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 25(3), pages 181-196.
    17. Muhammad Din & Munawarah & Imam Ghozali & Tarmizi Achmad, 2017. "The Follow Up of Auditing Results, Accountability of Financial Reporting and Mediating Effect of Financial Loss Rate: An Empirical Study in Indonesian Local Governments," European Research Studies Journal, European Research Studies Journal, vol. 0(4A), pages 443-459.
    18. Mélanie Roussy & Alexandre Perron, 2018. "New Perspectives in Internal Audit Research: A Structured Literature Review," Accounting Perspectives, John Wiley & Sons, vol. 17(3), pages 345-385, September.
    19. Ikhlas Hentati-Klila & Saida Dammak-Barkallah & Habib Affes, 2017. "Do auditors’ perceptions actually help fight against fraudulent practices? Evidence from Tunisia," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 21(3), pages 715-735, September.
    20. Vikash Kumar Sinha & Marika Arena, 2020. "Manifold Conceptions of the Internal Auditing of Risk Culture in the Financial Sector," Journal of Business Ethics, Springer, vol. 162(1), pages 81-102, February.
    21. Mélanie Roussy & Michelle Rodrigue, 2018. "Internal Audit: Is the ‘Third Line of Defense’ Effective as a Form of Governance? An Exploratory Study of the Impression Management Techniques Chief Audit Executives Use in Their Annual Accountability," Journal of Business Ethics, Springer, vol. 151(3), pages 853-869, September.
    22. Nathanael Betti & Steven DeSimone & Joy Gray, 2022. "The impacts of the use of data analytics and the performance of consulting activities on perceived internal audit quality," Working Papers 2202, College of the Holy Cross, Department of Economics.
    23. Maria del Rocio Moreno-Enguix & Ester Gras-Gil & Joaquin Hernandez-Fernandez, 2017. "An Explanation of Management of Local Governments in Spain Based on the Structure of the Internal Control System," Annals of Economics and Finance, Society for AEF, vol. 18(2), pages 393-410, November.

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