Joe Christopher

A critical analysis of the independence of the internal audit function : evidence from Australia

Purpose – This study aims to critically analyse the independence of the internal audit function through its relationship with management and the audit committee. Design/methodology/approach – Results are based on a critical comparison of responses from questionnaires sent out to Australian chief audit executives (CAEs) versus existing literature and best practice guidelines. Findings – With respect to the internal audit functions relationship with management, threats identified include: using the internal audit function as a stepping stone to other positions; having the chief executive officer (CEO) or chief finance officer (CFO) approve the internal audit functions budget and provide input for the internal audit plan; and considering the internal auditor to be a “partner”, especially when combined with other indirect threats. With respect to the relationship with the audit committee, significant threats identified include CAEs not reporting functionally to the audit committee; the audit committee not having sole responsibility for appointing, dismissing and evaluating the CAE; and not having all audit committee members or at least one member qualified in accounting. Originality/value – This study introduces independence threat scores, thereby generating analysis of the internal audit functions independence taking into account a combination of threats.

The Association between Corporate Governance Guidelines and Risk Management and Internal Control Practices: Evidence from a Comparative Study

Purpose - The purpose of this paper is to investigate whether the weaker focus on risk management and internal control within the Belgian corporate governance guidelines is associated with less developed risk management and internal control systems within Belgian companies, when compared to Australian companies. Design/methodology/approach - Theoretical arguments were drawn from institutional theory. Data for the study were collected through a questionnaire that was sent out to chief audit executives in Australia and Belgium. Findings - The paper finds that the weaker focus of the Belgian corporate governance guidelines on risk management and internal control is associated with less developed risk management and internal control systems in Belgian companies than in Australian companies. Originality/value - The paper contributes to the literature on corporate governance, as it suggests that the specific content of corporate governance guidelines is an important variable to take into account. This paper also confirms that institutional theory is a relevant framework to study on the one hand, corporate governance practices in a “comply or explain” context, and on the other hand, corporate governance practices within unlisted companies.

Governance Paradigms of Public Universities: An international comparative study

This study aims to develop a conceptual model of the wider influencing forces impacting the governance paradigms of public universities. It draws on the multi-theoretical governance concept and seeks to identify these forces through the lens of chief audit executives using a qualitative research approach. The interview data supported by published literature reveal universities are affected differently by a number of common influencing forces, resulting in different governance paradigms. These findings provide insights as to the causal factors that shape a public university’s governance paradigm. The practical implications of the findings are that these forces need to be taken into account in future governance studies of universities as it provides the basis to determine their stakeholder base; consequent contractual obligations with them; and the governance control mechanisms and processes to be developed and implemented at the board, operational and assurance levels of governance.

The adoption of internal audit as a governance control mechanism in Australian public universities – views from the CEOs

This study draws on the multi-theoretical approach to governance and the views of university chief executive officers (CEOs) to examine the extent to which internal auditing as a control mechanism is adopted in Australian public universities under an environment of change management. The findings highlight negative consequences of change and their causal factors for university management to address towards narrowing the current theory-practice gap of internal auditing.

Australian public universities: are they practising a corporate approach to governance?

This article draws on the multi-theoretical approach to governance and a qualitative research method to examine the extent to which the corporate approach is practised in Australian public universities. The findings reveal that in meeting the needs of multiple stakeholders, universities are faced with a number of structural, legalistic, and behavioural issues that are in tension with the corporate culture. The findings emerging from the interview data are: (a) the current constraints on the structural and operational framework of Australian public universities do not support corporate managerialism; and (b) the current governance framework of Australian public universities supports a pseudo-management culture. The findings help to explain the consequent type of governance control processes to be developed and implemented within the sector, and challenge the current myth that these universities are practising a corporate approach. The findings provide avenues for further research to confirm the findings.

Internal audit: Does it enhance governance in the Australian public university sector?

This study seeks to confirm if internal audit, a corporate control process, is functioning effectively in Australian public universities. The study draws on agency theory, published literature and ...

The Failure of Internal Audit: Monitoring Gaps and a Case for a New Focus

Within the management and organization field, the internal audit function (IAF) plays an important role in enhancing good governance. Given the spate of corporate collapses over the last 20 years, this article draws on a multitheoretical approach to governance and a critical review of the published literature to identify where IAFs have failed, and to provide a new focus to strengthen their role. Common themes regarding monitoring gaps by IAFs were identified as occurring across three governance levels. A contributory cause for these gaps is the poor structural and functional arrangements of the IAF, arising from the considerable flexibility afforded in its setup and delivery of services. A negative consequence of this flexibility is the ability of the board and management to manipulate the role of the IAF to the extent that it is not aligned with the intention of its setup as encapsulated in its definition.

Diffusion of Corporate Risk-Management Characteristics: Perspectives of Chief Audit Executives through a Survey Approach : Diffusion of Risk-Management Characteristics

This study examines how corporate risk-management characteristics in Australian public universities have diffused under an environment of conflicting management cultures. The findings reveal that corporate risk-management characteristics have diffused in a pluralist form to satisfy stakeholders of different management approaches across its governance levels as opposed to a unilateral form aligned to the corporate approach. The accepted practice of this adapted version challenges the existing notion that the adoption of corporate control processes in the public sector is problematic, and provides insights into the emergence of a hybrid control process to address the needs of multiple stakeholders. These findings have policy implications for defining a new hybrid governance-control paradigm for the public sector as an alternative to the corporate-influenced control paradigm, and provide avenues for further research to confirm the phenomenon with other corporate control processes, public-sector entities, and if so its impact on effective governance.