The impact of organizational culture on internal audit effectiveness

Details

Supervisors

Sarens, Gerrit

Faculty

Louvain School of Management

Degree label

Master [120] en ingénieur de gestion

Abstract

The main objective of this master’s thesis is to explore the potential impact of the culture of an organization on the effectiveness of its internal audit. This function is essential to the organizations by reviewing their processes and ensuring the risks are identified and managed. By doing so, the internal audit function brings an added value to its organization. During the first part of this paper, we address the key concepts used to assess our subject. Thus, we define what internal auditing and the effectiveness concept are, as well as the organizational culture and its characteristics through six of the nine cultural dimensions of the GLOBE model. From those concepts and literature review, we draw our research questions that are at the centre of this paper. Then comes the empirical analysis which was conducted through a qualitative research in order to better understand this complex phenomenon, and that is based on the interviews we conducted with internal auditors. This analysis allows us to draw conclusions regarding the relations between the organizational culture and the internal audit effectiveness. The results show several links between some cultural dimensions and the effectiveness. More precisely, we found a negative relation between the power distance and the effectiveness, while we found it to be positively related with the future orientation, the performance orientation, and the humane orientation.