Corporate managers' reliance on internal auditor recommendations

F. Greg Burton, Scott Emett, Chad A. Simon, David A. Wood

Research output: Contribution to journalArticle

15 Citations (Scopus)

Abstract

We investigate whether corporate managers' reliance on internal auditors' recommendations in an operational setting is influenced by three recommendation attributes: (1) whether the recommendation was consistent with or inconsistent with management preferences, (2) whether the recommendation was given by an outsourced or in-house internal auditor, and (3) whether the recommendation was quantitative or qualitative in nature. We use a 2×2×2 fractional factorial design to test our predictions. We find that managers change their initial position more when presented with preference-inconsistent recommendations than when presented with preference-consistent recommendations. We do not find differences in managers' reliance on the preference-inconsistent, non-quantified recommendations of outsourced versus in-house internal auditors. However, we find that managers are more likely to rely on the preference-inconsistent recommendations of in-house internal auditors when their recommendations are quantified as opposed to non-quantified, an effect that is not observed with outsourced internal auditors.

Original languageEnglish (US)
Pages (from-to)151-166
Number of pages16
JournalAuditing
Volume31
Issue number2
DOIs
StatePublished - May 1 2012
Externally publishedYes

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Auditors
Managers
Factorial design
Prediction

Keywords

  • Competence
  • In-house
  • Internal audit
  • Objectivity
  • Outsourcing

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

Corporate managers' reliance on internal auditor recommendations. / Greg Burton, F.; Emett, Scott; Simon, Chad A.; Wood, David A.

In: Auditing, Vol. 31, No. 2, 01.05.2012, p. 151-166.

Research output: Contribution to journalArticle

Greg Burton, F, Emett, S, Simon, CA & Wood, DA 2012, 'Corporate managers' reliance on internal auditor recommendations', Auditing, vol. 31, no. 2, pp. 151-166. https://doi.org/10.2308/ajpt-10234
Greg Burton, F. ; Emett, Scott ; Simon, Chad A. ; Wood, David A. / Corporate managers' reliance on internal auditor recommendations. In: Auditing. 2012 ; Vol. 31, No. 2. pp. 151-166.
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