Focusing on the impact of adherence to the Institute of Internal Auditors’ (IIA) Core Principles, Christopher G. Calvin and Marc Eulerich explore how these principles shape the effectiveness and scope of internal audit (IA) activities in their paper The Effects of Internal Audit’s Core Principles on Audit Characteristics. Based on survey data from Chief Audit Executives (CAEs) in Germany, Switzerland, and Austria, their study evaluates the influence of compliance on key aspects such as audit scope, strategic alignment, and stakeholder reliance on audit outcomes.
The IIA’s Core Principles aim to establish effective internal auditing by promoting values such as integrity, competence, objectivity, and strategic alignment. The study finds that greater adherence to these principles is associated with a broader scope of IA activities, better alignment with organizational strategy, and more extensive use of IA outputs by stakeholders. However, the principles’ impact varies across different audit characteristics and does not uniformly enhance all aspects of IA effectiveness. Notably, adherence to the principle of being “insightful, proactive, and future-focused” is linked to improved stakeholder engagement and strategic alignment, while the principle of “adequate resourcing” enhances stakeholder reliance on audit outcomes.
The research underscores the importance of trust as a key factor in achieving audit effectiveness. Trustworthiness, fostered through principles such as integrity and competence, encourages stakeholders to rely more on IA outputs. This trust is particularly evident in areas requiring strategic alignment and stakeholder collaboration, highlighting the need for internal auditors to go beyond technical compliance and establish meaningful relationships with organizational stakeholders.
Interestingly, not all Core Principles show equal impact. While some principles, such as effective communication, are widely advocated, the study reveals limited evidence of their direct influence on audit effectiveness. This finding suggests that certain principles may be more context-dependent and require further refinement in their application. Moreover, the study identifies opportunities for future research, such as exploring variations in Core Principle adherence across industries and testing their applicability in different cultural and regulatory environments.
Overall, the findings support the IIA’s emphasis on the Core Principles as a foundation for high-quality internal auditing. The study offers practical insights for practitioners, recommending that internal auditors prioritize principles that enhance strategic alignment and stakeholder trust. For a comprehensive understanding, the article is available in the Journal of International Accounting Research here.