Influencing Factors on Internal Auditing Maturity Using PLS-PM

Abstract

The objective of this research is to explore and identify the factors that impact the maturity of the internal audit function (IAF). Internal auditing plays a crucial role in modern organizations, assisting senior management in determining whether operations conform to regulations, internal policies, and best practices. The contribution lies in offering insights that allow companies and public sectors to enhance their audit teams based on identified variables. The research utilizes the Internal Audit Foundation survey database “Internal Audit: A Global View (2022)”, which contains 3640 responses from 159 countries and territories, covering internal audit topics worldwide and employs partial least squares path modeling for exploratory analysis, aiming to provide a reliable model with relevant variables explaining the maturity of internal auditing. The following hypotheses were accepted: Assessment (-0.14534), Qualification (0.8154) and Strategic Orientation (0.1659) affect internal audit maturity. Additionally, the hypotheses that type of information (0.1102) and Strategic Orientation (0.4894) affect partnerships were also accepted. The model explains approximately 84.6% of internal audit maturity and 29.9% of partnerships with 95% confidence. To enhance the maturity of the IAF, companies can invest in developing employees’ expertise through structured entry and specialization training and mentoring programs. The Internal Audit Charter should be formalized by top management and widely disseminated throughout the organization. Maturity is negatively impacted when quality assessments are not performed and communicated to senior management and the board.

Keywords

• Internal audit
• maturity
• PLS-PM