Using data from 825 organizations, we examine (1) the extent of ERM implementation and the factors that are associated with cross-sectional differences in the level of ERM adoption, and (2) specific ERM design choices and their effect on perceived ERM effectiveness. Broadly consistent with previous work in this area, we find that the extent of ERM implementation is influenced by the regulatory environment, internal factors, ownership structure, and firm and industry-related characteristics. As to ERM effectiveness, we find that organizations generally subscribe to a key premise of the COSO ERM framework, i.e. that ERM should address the full set of risks that affect the entity's strategic, operational, reporting, and compliance objectives. However, our results also raise some concerns as to the COSO framework. Particularly, we find no evidence that application of the COSO framework improves ERM effectiveness. Neither do we find support for the mechanistic view on risk management that is implicit in COSO's recommendations on risk appetite and tolerance.

Based on a survey carried out at the behest of the European Confederation of Institutes of Internal Auditors (ECIIA), this article rather ambitiously attempts to sketch out the relationship between the Internal Audit Function (IAF) and Corporate Governance (CG) issues among the top listed companies in the European Union (EU). ‘Attempts’ is used advisedly, because the authors are far from convinced that the results they obtained – in terms of numbers and percentages of responses – have provided them with a solid basis for the textured and nuanced overview they were aiming at. Having said that, it is, nevertheless, clear that there are surprising, and even startling, differences in the way Internal Auditors operate in the EU, even in the largest companies, and their awareness of, and opinions about, their role in CG concerns. Put succinctly, there is plenty of room for evolution in both mind set and daily practice.

By conducting the 2006 global Common Body of Knowledge (CBOK) study, The Institute of Internal Auditors (IIA) attempts to better understand the expanding scope of internal auditing practice throughout the world. The purpose of this review of recent internal auditing literature in Europe is to document how the internal audit function is changing in response to the shifts in global business practices. The literature in Europe is reviewed with a focus on developments that have implications for the expanded scope of internal auditing and the changing skill sets of internal auditors and their role in enhancing good corporate governance. This focus has implications for CBOK 2006. The literature indicates changes in the activities performed by internal auditors. The increasing complexity of business transactions, a more dynamic regulatory environment in Europe, and significant advances in information technology have resulted in opportunities and challenges for internal auditors. Although in 2004, The IIA responded to the changing organizational environment by updating the professional practices framework, more work needs to be done to prepare internal auditors for the expanded set of skills and knowledge required to perform audits of the future

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