Journal article
The Association between Internal Audit Operations-Related Services and Firm Operating Performance
Like Jiang, William F Messier, David A Wood
Auditing A Journal of Practice & Theory | American Accounting Association | Published : 2020
DOI: 10.2308/ajpt-52565
Abstract
In this paper, we examine whether operations-related services (ORS) provided by the internal audit function (IAF) bring economic benefits to firms. Using a sample constructed by matching a global internal auditor survey with public firms' data in Compustat, we find that the extent of the IAF's involvement in ORS has a significant positive association with operating performance. Further, by decomposing ORS into traditional assessment services (e.g., operational audit) and more business-oriented facilitation services (e.g., strategy consulting), we document that assessment services are prevalent in the IAFs whereas facilitation services are less frequent. Both types of services have a positive..
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Funding Acknowledgements
We are grateful to the Institute of Internal Auditors Research Foundation (IIARF) for granting us access to the CBOK survey data on conditions of anonymity and confidentiality. Helpful comments were provided by Margaret Abernethy, Drew Allen, Lisa Baudot, Shane Dikolli, Matt Ege, Marc Eulerich, David Larcker, Rainer Lenz, Kjell Henry Knivsfla, Jayanthi Krishnan (editor), Adi Masli, Nathan Mecham, Matthew Pinnuck, Thomas Ruchti, Gerrit Sarens, Nate Sharp, Wei Shi, Douglas Skinner, Naomi Soderstrom, two anonymous reviewers, workshop participants at the University of DuisburgEssen and The University of Melbourne, and two anonymous reviewers from the 2017 AAA Annual Meeting. Professor Jiang acknowledges financial support from the Faculty of Business & Economics at The University of Melbourne. Professor Messier received financial support from his Norwegian Institute of Public Accountants (DnR) Professorship in Auditing at NHH.