The Impact of using Internal Audit as Management Training Ground on Audit Quality

• In Event: Continental Breakfast & Research and Education Forum
  In Paper Session: Table 2: Internal Control and/or Internal Audit

Abstract

This study examines the impact of the practice of using the internal audit function (IAF) as management training ground (MTG) on internal audit quality. It analyzes data from the Institute of Internal Auditors’ 2015 Common Body of Knowledge Survey that was administered to the internal auditing globally. The findings of the suggest that auditors employed by organizations that use the IAF as MTG (MTG auditors) are less objective and also less competent that those auditors employed by organizations that do not use the IAF as MTG (non-MTG auditors), when considering individual auditor characteristics. However, contrary to predictions, significantly more MTG auditors were found to be in compliance with IIA auditing standards, a factor indication audit quality, than non-MTG auditors. Further analyses found that MTG auditors were likely to belong to larger organizations and had better training opportunities than non-MTG auditors, factors that may mitigate MTG auditors’ weakness in individual competence, and provide necessary structures for complying with standards. No factors were identified that mitigated MTG auditors’ reduced objectivity. 

Author

• Grace Mubako, University of Texas at El Paso