Internal Audit Stigma Awareness and Internal Audit Outcomes: Stuck between a Rock and a Hard Place

43 Pages Posted: 16 Nov 2017

See all articles by Marc Eulerich

Marc Eulerich

University of Duisburg-Essen, Mercator School of Management

Joleen Kremin

Portland State University

K. Kelli Saunders

University of Nebraska at Lincoln - School of Accountancy

David A. Wood

Brigham Young University - School of Accountancy

Date Written: November 13, 2017

Abstract

Prior research finds that the internal audit function (IAF) plays a critical role in organizations but that stakeholders are still relatively dissatisfied with the IAF and that those out of internal auditing hold a negative stigma toward the profession. We therefore test if internal auditors are aware of these negative perceptions and whether this awareness is associated with negative internal audit outcomes. The results of two samples of experienced internal auditors, one from the United States and one from Europe, suggest that practicing U.S. (European) internal auditors have relatively neutral (positive) perceptions of their profession. However, when either group believes there is a negative stigma about internal auditing, they report negative work outcomes, including less ability to add value, less influence in the organization, more resistance to implementing their recommendations, and more pressure to change audit findings. We also find that increased perception of stigma is only moderately related to increased turnover intentions (but not actual turnover rates), and we find no connection between perception of stigma and job satisfaction. Taken together, the results suggest that negative perceptions of internal audit have significant impact on the profession, and, consequently, more efforts are needed to improve the perception of internal auditing.

Keywords: Internal audit, Occupational stigma, Professional taint, Dirty work

JEL Classification: M4, M40, M41, M42, M49, G3, G34

Suggested Citation

Eulerich, Marc and Kremin, Joleen and Saunders, K. Kelli and Wood, David A., Internal Audit Stigma Awareness and Internal Audit Outcomes: Stuck between a Rock and a Hard Place (November 13, 2017). Available at SSRN: https://ssrn.com/abstract=3070404 or http://dx.doi.org/10.2139/ssrn.3070404

Marc Eulerich

University of Duisburg-Essen, Mercator School of Management ( email )

Lotharstrasse 65
Duisburg, 47057
Germany
00492033792600 (Phone)

HOME PAGE: http://www.msm.uni-due.de/ircg

Joleen Kremin

Portland State University ( email )

PO Box 751
Portland, OR 97207
United States
5037252278 (Phone)

HOME PAGE: http://https://www.pdx.edu/sba/joleen-kremin

K. Kelli Saunders

University of Nebraska at Lincoln - School of Accountancy ( email )

307 College of Business Administration
Lincoln, NE 68588-0488
United States

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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