The purpose of this paper is to identify, examine and evaluate characteristics of an internal audit function (IAF) that help to distinguish between two groups of IAFs with sharply contrasting levels of perceived effectiveness. Based on survey data from 46 heads of internal audit (chief audit executives, CAEs) in private organizations in Germany, we differentiate IAFs that indicate varying and contrasting levels of internal auditing (IA) effectiveness. In doing so, this study plants the seeds for a potential general theory of IA effectiveness -a theory that may also have relevance in other countries. Extant theory highlights the multi-faceted aspects of IA effectiveness and these are considered in the study to sort its 'wheat from the chaff'. We suggest four key dimensions or categorical blocks: organization, IA resources, IA processes and IA relationships. Within these dimensions, statistically valid discriminatory characteristics and features identified in the study include: the existence of an IA charter that is agreed by the board/audit committee (AC); possible career progression after a tenure in IA; some degree of co-sourcing and outsourcing of IA services; the level of training and professional qualification of IA staff and CAEs; the use of IA technology and risk-based IA; whether IA makes recommendations for improving the governance process and rates individual findings and grades the overall report; whether the CAE has appropriate access to the board/AC; whether the CAE benefits from senior management's (SM) and the board/AC's input to the IA plan; and the CAE's informal contact with SM. Appropriately employed, a mix of these characteristics contribute to a theoretical grounding that may help explain IA effectiveness.

Purpose -Despite the increasing recognition that organizations should report on relevant sustainability matters, the importance and value to stakeholders of these reports being independently assured are not well appreciated. The objective of the paper is to underline that such assurance can be (and is) provided by the internal audit function and, in doing so, that function makes a significant contribution to effective corporate governance.Design/methodology/approach -Theoretical in nature, the paper makes reference to a few ''real-world'' illustrations. It is review in character and in a relatively systematic manner reviews key internal auditing professional standards-guidance in conjunction with prior theoretical and empirical research.Findings -The paper reinforces the argument that reporting of sustainability policies, practices and measures, without independent assurance, is of reduced value to stakeholders. The paper provides evidence to show how, despite the potential to do so, internal auditing has not always been promoted globally in this role.Research limitations/implications -The paper is limited to a theoretical consideration. There is potential for it to be enhanced by further empirical research demonstrating the value of independent internal auditing within sustainability programs and reporting.Originality/value -The paper is possibly the first to make explicit the linkage between the reporting of sustainability and the assurance of such reports. It should help make boards of organizations in emerging markets more aware of internal audit in relation to sustainability in terms of corporate responsibility and governance.

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Internal auditing has been adding value in organisations across all sectors for many years. This paper is based on research by the authors into this value in the UK, widened to include the contribution by internal auditing's professional development worldwide. This development is based mainly on international internal auditing standards, now receiving recognition by governments, regulators, external auditors and other authorities across the world. Not least by the worldwide requirements of the US Sarbanes-Oxley Act of 2003, and board responsibility for the effectiveness of internal control. The paper discusses how the assurance, compliance and consultant roles of internal auditing are being recognised today at board level in many organisations as valuable contributors to good governance practices.

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