The position of an internal audit function (IAF) as a ‘servant of two masters’ (i.e., management and the audit committee) may lead to a conflict of priorities. In this setting, the tone at the top set by the Chief Audit Executive (CAE) plays a critical role in balancing the potentially competing priorities of the ‘two masters’. We test two hypotheses in a mixed experimental design with the communicated preferences of the CAE to subordinates (cost reduction vs. effectiveness of internal controls) as a between-subjects factor, and levels of ambiguity (low, medium, high) manipulated within-subjects. Findings suggest that the emphasis in the CAE's message can influence internal auditors' judgments, and such influence is more pronounced when task ambiguity is high, resulting in the elimination of a significantly greater number of internal controls and the design of less effective processes. We discuss implications of our results for modern IAFs and the role of the CAE.
|Seiten (von - bis)||166 - 181|
|Fachzeitschrift||International Journal of Auditing|
|Publikationsstatus||Veröffentlicht - 2015|
Österreichische Systematik der Wissenschaftszweige (ÖFOS)
- 502033 Rechnungswesen
- 502044 Unternehmensführung