The roles and effectiveness of internal audit: a multi-theoretical and multi-method study.

Drawing on new theoretical perspectives for the IA setting, this dissertation structured as a collection of three papers aims to provide insights and shed new light into the roles and effectiveness of the IAF. The first paper provides a synopsis of extant IA literature and the main theoretical lenses employed in this area. This study tackle the issue of the lack of use of theories in IA research and uses social network analysis to offer possible explanations for the failure of IA research to build on theories and develop new theoretical frameworks to explain and predict IA practices. This study also provides guidance and offers new theoretical perspectives for IA researchers. This literature review focus on the roles and effectiveness of the IAF examined in prior literature providing a thorough review of IA studies under several theoretical frameworks: from an agency lens, where the IAF is investigated as a monitoring mechanism, to the institutional lens, mainly used to explore the differences in IA practices, and the stakeholder theory, where the various definitions of IAF effectiveness and IAF activities are investigated based on the perspective of several stakeholders. Other emergent theories are included in the analysis and several possible research opportunities are discussed based on the established theoretical frameworks and emerging paradigms, or combination of theories relevant for the IA field. The second paper introduces a new theoretical framework for IA research and provides a new angle of looking at the factors influencing IAF quality and effectiveness. As the IAF should collectively possess the knowledge, skills, and competences to perform high quality audit (IIA, 2017), this study draws on the social capital perspective and uses social network analyses to investigate the critical process of knowledge sharing among internal auditors. Specifically, this second paper uses proprietary archival and survey data collected from a US health-care public company to investigate the effects of internal auditor’ social ties on knowledge sharing and individual auditors’ performance. The results provide initial empirical evidence that different kinds of knowledge flow through advice-seeking ties, trust ties and friendship ties, affecting in different ways technical and soft dimensions of individual internal auditors’ job performance. After taking an individual level of analysis to tackle the concept of IA quality and effectiveness, this dissertation shifts its focus on the roles of the IAF. The IAF has the responsibility to evaluate and improve the effectiveness of risk management, internal controls, and governance processes. Specifically, the third paper answers to the call for additional research on the role of the IAF in risk management (RM). Drawing on the theory of Stakeholders Identification and Salience (Mitchell et al., 1997), this study uses data collected through semi-structured interviews with 16 Italian chief audit executives (CAEs), to identify who really counts for CAEs. The results show that the role of the IAF regarding RM (assurance role vis-à-vis consulting role) and internal auditors’ focus on different types of risks are driven by the salience of the different IAF stakeholders.