Entity-Level Controls: The Internal Auditor's Assessment of Management Tone at the Top

Current Issues in Auditing, Vol. 3, No. 1, pp. 1-13, 2009

23 Pages Posted: 9 Nov 2008 Last revised: 10 Feb 2010

See all articles by James C. Hansen

James C. Hansen

Weber State University Goddard School of Business and Economics

Nathaniel M. Stephens

Utah State University - School of Accountancy

David A. Wood

Brigham Young University - School of Accountancy

Date Written: November 7, 2008

Abstract

The internal audit function's (IAF) regular interaction with management and continual presence within the organization place it in a unique position to monitor the organization. Although the IAF has significant potential to evaluate and improve corporate governance, research has yet to explore how internal auditors assess an important component of corporate governance - management tone at the top. This paper reports survey evidence of 578 practicing internal auditors related to (1) current internal auditing practices regarding assessing management's tone, (2) internal auditor's current assessments of management's tone, and (3) potential future practices internal auditor's could perform to improve management's tone. In addition, we examine whether tone at the top is higher in organizations where internal auditors perform tone at the top assessments and if assessments differ based on what level of internal audit professional performs tone at the top assessments.

Keywords: Internal Audit, Entity-Level Controls, Tone at the Top, Corporate Governance

JEL Classification: M41, M49, G34, G38

Suggested Citation

Hansen, James C. and Stephens, Nathaniel M. and Wood, David A., Entity-Level Controls: The Internal Auditor's Assessment of Management Tone at the Top (November 7, 2008). Current Issues in Auditing, Vol. 3, No. 1, pp. 1-13, 2009. Available at SSRN: https://ssrn.com/abstract=1297362

James C. Hansen

Weber State University Goddard School of Business and Economics ( email )

1337 Edvalson St. Dept 3803
Ogden, UT 84408
United States
801-626-6433 (Phone)

Nathaniel M. Stephens

Utah State University - School of Accountancy ( email )

Logan, UT 84322-3540
United States
435-797-8016 (Phone)

David A. Wood (Contact Author)

Brigham Young University - School of Accountancy ( email )

518 TNRB
Brigham Young University
Provo, UT 84602
United States
801-422-8642 (Phone)
801-422-0621 (Fax)

HOME PAGE: http://marriottschool.byu.edu/employee/employee.cfm?emp=daw44

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