In their article A Study of Diversity and Performance in Internal Audit Teams: Insights from Chief Audit Executives Annika Bonrath and Marc Eulerich investigate the relationship between diversity and the performance of internal audit functions (IAFs). The research studies the complex and context-sensitive outcomes of diversity on both demographic and cognitive aspects.
The study uses data collected from 302 chief audit executives across three European countries to examine the effects of gender, nationality, and educational diversity. It reveals that these forms of diversity significantly impact stakeholders‘ reliance on internal audit results, a proxy for perceived internal audit performance. Demographic diversity, including gender and nationality, demonstrates a dual effect. Balanced gender diversity is associated with higher perceived performance, while skewed gender compositions (e.g., heavily male or female teams) tend to hinder it. National diversity, increasingly important in globalized contexts, correlates positively with perceived performance, though cultural differences can sometimes present challenges.
Cognitive diversity, as represented by varied educational backgrounds and professional certifications, is also shown to enhance perceived performance. Teams with diverse qualifications tend to offer broader perspectives, contributing to better decision-making and audit quality. This supports the argument that educational diversity, more than demographic diversity, is a strong driver of performance in complex professional tasks.
However, the study also cautions against simplistic applications of diversity quotas. It emphasizes that diversity’s benefits depend heavily on team integration and avoiding tokenism, which can alienate minority members and limit the inclusion of diverse perspectives. The findings advocate for thoughtful team composition and highlight the need for further research to understand the nuances of these dynamics fully.
This paper offers valuable insights for internal audit professionals, illustrating how diversity—when managed effectively—can add significant value to organizations. For a deeper dive into the findings, you can access the article in the Journal of International Accounting Research here.