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Abstract
Purpose - The purpose of this paper is to describe and compare in a qualitative way how internal auditors perceive their current role in risk management within US and Belgian companies.
Design/methodology/approach - In order to get adequate data, Chief audit executives from 10 different companies were interviewed and relevant documents were analyzed.
Findings - In the Belgian cases, internal auditors' focus on acute shortcomings in the risk management system creates opportunities to demonstrate their value. Internal auditors are playing a pioneering role in the creation of a higher level of risk and control awareness and a more formalized risk management system. In the US cases, internal auditors' objective evaluations and opinions are a valuable input for the new internal control review and disclosure requirements mentioned in the Sarbanes Oxley Act.
Research limitations/implications - Given the qualitative nature of this study, generalization to all Belgian and US companies is not possible. The time specific character of the subject is an opportunity for future longitudinal research.
Practical implications - In Belgium, the internal auditing profession is actually in a kind of "transition phase". In order to survive this transition phase, internal auditors need to assume a "teaching role" vis-à-vis the different management levels to make them aware of their responsibilities in risk management. After this transition period, internal auditors will be able to focus more on their core activities.
Originality/value - In addition to a number of quantitative studies, this paper extends in a qualitative and comparative way the understanding of the specific role of internal auditors in risk management within US and Belgian companies.
Keywords Auditors, Auditing, Risk management, United States of America, Belgium
Paper type Research paper
Introduction
By stating that the internal audit activity should evaluate and contribute to the improvement of risk management, control and governance, The Institute of Internal Auditors, IIA (2004) recognizes the assurance and consulting role of internal auditors in corporate governance. Until now, no empirical research on the role of internal auditors in risk management (including internal control) has been conducted within a Belgian context. In this study, we elaborate in more detail how internal auditors perceive their current role in risk management within the specific Belgian context, where internal auditing is still a relatively young...