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internal auditors
Kalbers, Lawrence P; Fogarty, Timothy J . Auditing ; Sarasota Vol. 14, Iss. 1, (Spring 1995): 64.
ABSTRACT
Internal auditors have been encouraged by the Institute of Internal Auditors and the practitioner literature to adopt
professional attitudes to facilitate the accomplishment of personal and organizational objectives. Results of a
recent study indicate that professionalism for internal auditors approximates the 5 dimensions of professionalism.
However, demands for autonomy proved somewhat problematic for internal auditors. Each of the 5
professionalism dimensions are associated with one or more outcomes such as job performance, job satisfaction,
organizational commitment, and turnover intentions. The results suggest that professionalism is not a panacea, in
that its effects are neither universal or indifferent to the nature of concomitants.
FULL TEXT
The emergence of internal auditors as a specialized subfield of the broader occupation of auditing has occurred
gradually, but is usually traced back no further than the end of the Second World War (Courtemanche 1986).
Internal auditors now serve an important role in the modern corporation. Their work focuses on the extent to which
other functions in the organization are operating within the control parameters established by law and corporate
policy. In addition to evaluating compliance, internal auditors pass judgment upon the efficiency and economic
viability of productive elements of the company.
Perhaps more than any other concept, professionalism has captured the attention of the internal auditing
community. The practitioner literature is replete with the advocacy of internal auditing as a profession and the
monitoring of progress toward that goal (e.g., Rodriquez 1991). Within the community, a large number of issues
have been met with encouragement for more professional behavior by internal auditors (e.g., Stock et al. 1988).
Neither practitioners nor academics have precisely defined what acting in a professional manner entails for
internal auditors. Furthermore, the value of individual professionalism has been assumed by practitioners and
practitioner organizations, but not adequately demonstrated. On the other hand, professionalism has come under
increasing scrutiny by certain governmental agencies and academic circles. In internal auditing, is professionalism
a self-serving aggrandizement for its members, or does it provide a structure to produce important benefits to both
the practitioners and the constituents of internal auditing? This study proposes to clarify this rather troublesome,
albeit critical, characteristic of individuals for a group that has been greatly neglected by accounting and auditing
research.
The primary goal of this study is to better understand professionalism of internal auditors and its relationship to
valued individual and organizational work outcomes. For the internal auditing community, their employers, and
their clientele, the study provides some assessment of the utility of investments in specific types of professional
activities and commitments while revealing the need for further elaboration of expertise within a model of
professionalism. For academics, the study provides new insights into the nature and consequences of
professionalism in general, and in internal auditing in particular. The study accomplishes this through an empirical
evaluation of the professionalism of internal auditors and its association with a set of important work outcomes.
RESULTS
Response
Useable information was obtained from 455 internal auditors in 13 organizations. This represented a 91.4%
response rate, which compares favorably with other studies of this occupational group.(2) In addition, supervisor
ratings were obtained for 435 of the internal auditors (87.3% response rate). Table 2 provides additional
information about the respondents for this study. (Table 2 omitted)
The Structure of the Variables
The confirmatory analysis capabilities of LISREL were used to investigate the dimensionality of all constructs.(3)
As expected, this analysis supported the separate scales of job satisfaction, affective organizational commitment,
continuance organizational commitment, self-rated job performance, supervisor-rated job performance, outside
turnover intentions, and inside turnover intentions.(4)
Demographic variables were combined to construct an experience variable. Individual attributes of age, rank
(scaled 1-3), months in internal auditing, and months with the organization were treated as measures of a latent
experience construct and are important only insofar as they have common variance. Confirmatory factor analysis
revealed that no alternative structure to a one-factor experience construct was plausible.
Confirmatory analysis was also used to examine the extent to which measured variables aligned with the
theoretical (latent) constructs for professionalism.(5) Table 3 contains Confirmatory Factor Analysis results for
various versions of the professionalism construct. (Table 3 omitted) For these purposes, the a priori five-factor
model was constructed with a sequential elaboration of the factor structure beginning with the single-factor
model. Results from the best fitting two, three, and four-factor models also are included.(6) Based on the AGFI and
CSR statistics, the a priori model shows superior fit to all models and is used for hypothesis testing.
Test of Hypotheses 1-4
Figure 2 presents the results from the simultaneous test of all hypothesized effects. (Figure 2 omitted) This set of
relations represents the final outcome of an iterative process that removed effects that were not significant when
such a deletion significantly (p<.01) improved overall model fit.(7) Relationships depicted in this figure could not
be removed without a significant increase in total model Chi-Square per degree of freedom gained.(8) Therefore,
the illustrated relationships represent the best and most parsimonious reproduction of the inherent correlation
matrices of the data.
A positive professionalism-job performance relationship was expected in H sub 1 . Only three of the ten possible
performance effects survived the parameter deletion procedure. Belief in self-regulation proved significant (p<.01)
in the expected direction for supervisor-rated performance. Those auditors who believe most strongly in a set of
internal auditing standards apparently translate such beliefs into action. Both the community affiliation and
autonomy demands dimensions of professionalism were positive and significant in their relationships to self-rated
performance. Social obligation and dedication proved unrelated to either version of performance. It appears that
auditors who are involved personally in the professional community or who believe in self-autonomy tend to rate
their own contributions to the organization as more pronounced. However, those who are dedicated to the more
abstract role and goals of their profession are not more likely to judge themselves, or be judged, as better
performers. H sub 1 should be partially accepted.
Figure 2 reveals that there are two significant effects between the dimensions of professionalism and those of
organizational commitment. As hypothesized, dedication to the profession is positively related to affective
commitment. Those that are more devoted to the "calling" of internal auditing are more likely to experience a close
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The authors acknowledge financial support from Arthur Andersen &Co., the Greater Cleveland/Akron Chapter of the
Institute of Internal Auditors, and a Wasmer Summer Research Grant from John Carroll University. The authors
thank the Directors of Internal Audit and the internal audit staffs of the 13 organizations included in the study for
their participation. The authors also thank the participants in the Case Western Reserve Department of
Accountancy Research Colloquium, Ken Eason, and three anonymous reviewers for their invaluable comments on
earlier versions of this paper. An earlier version of this paper was awarded second place in the 1992 national
DETAILS
Location: US
Volume: 14
Issue: 1
Pages: 64
ISSN: 02780380