A Study of the Informal Interactions between Audit Committees and Internal Auditors in Australia

Sarens, Gerrit; Christopher, Joseph; Zaman, Mahbub

doi:10.1111/auar.12024

Cited by 37 publications

(43 citation statements)

References 55 publications

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“…However, the two actors had divergent goals and political intentions. The regulators' rationale on installing new self-checks and balances to curb excessive risk-taking by banks in the aftermath of the financial crisis was linked to their historical perception of IA as a control and governance mechanism (Chambers 2014;Collier and Zaman 2005;Mihret 2014;Sarens et al 2013). However, contrary to the recent thesis of Baud and Chiapello (2016), the regulators, in our case, still believed in self-regulation and hesitated to suggest a strict approach to the IA of risk culture (Power 1997(Power , 1999.…”

Section: Discussionmentioning

confidence: 99%

Manifold Conceptions of the Internal Auditing of Risk Culture in the Financial Sector

Sinha

Arena

2018

J Bus Ethics

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This exploratory study investigates the manifold conceptions of the internal auditing (IA) of risk culture prevalent among four influential actors of the financial sector-regulators, normalizers, consultants, and implementers. By inductive analysis of 20 interviews and 295 documents, we illustrate a two-step interpretive scheme utilized by the four actors in their IA approaches of risk culture: defining broad goals and designing visibility schemes. The visibility schemes were tied to the demarcation, measurement, as well as the IA data collection techniques of risk culture. Our results indicate two dichotomous interpretations among the four actors concerning the IA of risk culture. The first interpretation, prevalent among regulators and implementers, promotes the control of risk culture primarily through verification. The second interpretation, adopted by consultants and normalizers, promotes the control of risk culture by IA along with the empowerment of employees through training programs. Our results not only contribute to understanding IA expansions, specifically to non-tangible domains such as risk culture but also enrich the literature exploring the mechanisms different stakeholders utilize to shape weakly professionalized IA practices.

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Section: Discussionmentioning

confidence: 99%

Manifold Conceptions of the Internal Auditing of Risk Culture in the Financial Sector

Sinha

Arena

2018

J Bus Ethics

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“…an effective AC can only be achieved, if the communication to different governance functions is well established and all information that matters is shared directly. Especially, while prior literature identifies informal communication to the IAF outside of formal meetings as a key success factor (Bedard & Gendron, 2010;Gendron & Bedard, 2006;Beasley et al, 2009;Sarens et al, 2013;Turley & Zaman, 2007). But strong communicational ties to one stakeholder may affect the other as well.…”

Section: Developmentmentioning

confidence: 99%

“…In practice, the IAF supports EBs and ACs through the provision of various assurance and consulting activities (Hass et al, 2006;Sarens et al, 2009Sarens et al, , 2013Lenz et al, 2014) and helps the AC in reducing liability risks. In particular, the IAF is associated with the areas of risk management, internal control systems, financial reporting, and the entire governance process (Abbott et al, 2016;Lenz et al, 2014;Hass et al, 2006).…”

Section: Introductionmentioning

confidence: 99%

The Internal Audit Dilemma - The Impact of Executive Directors Versus Audit Committees on Internal Auditing Work

Eulerich

Henseler²,

Köhler

2017

SSRN Journal

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“…However, the survey methodology limits their research to categorical answers (e.g., "Excellent" to "Poor"; "Strongly agree" to "Strongly disagree"). Zaman and Sarens (2013) and Sarens et al (2013), also using survey methods, find the quality of internal audit to be enhanced by audit committee informal interactions. Zain and Subramaniam (2007) highlight the importance of the leadership role of audit committees in supporting the internal audit function.…”

Section: Audit Committees: Practitionersmentioning

confidence: 99%

Audit committees: practices, practitioners and praxis of governance

Brennan

Kirwan

2015

Accounting, Auditing &Amp; Accountability Journal

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Purpose – The purpose of this paper is to review and critique prior research on audit committees using a practice-theory lens. Research on audit committees has followed the same trajectory as early research on boards of directors, which has been criticised for its singular theoretical perspectives and methodologies that do not capture the complexity of real-world experiences/behaviours. Design/methodology/approach – The authors devise an analytical framework based on practice theory to conduct the review. The authors examine what audit committees should do (i.e. best practice) vs what audit committees actually do (i.e. actual activities in practice – praxis). Attributes of audit committee members, and the relationship dynamics relevant to their role execution (i.e. practitioners), are considered. Findings – Research on boards has found that over-emphasis on agency theory’s monitoring role negatively impacts boards’ effectiveness. The authors invoke other theories in examining what audit committees do in practice. The authors characterise the role of audit committees as oversight not monitoring. The authors question whether, similar to auditing, audit committees are blamist tools or are genuinely orientated towards supporting improvements in organisational management systems. The authors unpack the ritualistic ceremonial behaviours and symbolic endeavours vs substantive engagement by audit committees. The analytical framework also considers the “guardianship circle” around audit committees in the form of the key practitioners and their relationships: audit committee members, auditors and managers. Originality/value – Drawing on the analytical framework, the authors provide directions for further opportunities for research of audit committees.

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A Study of the Informal Interactions between Audit Committees and Internal Auditors in Australia

Cited by 37 publications

References 55 publications

Manifold Conceptions of the Internal Auditing of Risk Culture in the Financial Sector

Manifold Conceptions of the Internal Auditing of Risk Culture in the Financial Sector

The Internal Audit Dilemma - The Impact of Executive Directors Versus Audit Committees on Internal Auditing Work

Audit committees: practices, practitioners and praxis of governance

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