Internal Audit Stigma Awareness and Internal Audit Outcomes: Stuck Between a Rock and a Hard Place.

• In Event: Auditor and Client Reputation

Abstract

Prior research finds that the internal audit function (IAF) plays a critical role in organizations but that stakeholders are still relatively dissatisfied with the IAF and that those out of internal auditing hold a negative stigma toward the profession. We therefore test if internal auditors are aware of these negative perceptions and whether this awareness is associated with negative internal audit outcomes. The results of two samples of experienced internal auditors, one from the United States and one from Europe, suggest that practicing U.S. (European) internal auditors have relatively neutral (positive) perceptions of their profession. However, when either group believes there is a negative stigma about internal auditing, they report negative work outcomes, including less ability to add value, less influence in the organization, more resistance to implementing their recommendations, and more pressure to change audit findings. We also find that increased perception of stigma is only moderately related to increased turnover intentions (but not actual turnover rates), and we find no connection between perception of stigma and job satisfaction. Taken together, the results suggest that negative perceptions of internal audit have significant impact on the profession, and, consequently, more efforts are needed to improve the perception of internal auditing.

Authors

• Marc Eulerich, University Duisburg-Essen

• Joleen Kremin, Portland State University

• Kristen Kelli Saunders, University of Nebraska-Lincoln

• David A Wood, Brigham Young University