Internal auditor communications: an experimental investigation of managerial perceptions

Purpose: The purpose of this paper is to examine potential determinants of management’s agreement with internal auditor recommendations of an interim assurance engagement. Design/methodology/approach: The experiment involved a 2 × 2 × 2 design with internal auditor gender, mode of communication and root cause variables randomly assigned to 228 experienced managers. Findings: When the internal auditor includes a root cause for an identified deficiency in an internal audit report, management perceptions of the quality of that report improve. The gender of the internal auditor who communicates the audit finding with management does not significantly impact management’s perceptions. Additionally, communicating the internal audit report via e-mail instead of videoconference results in improved managerial perceptions of the quality of the internal auditor. While improvements in perceptions of internal auditor quality lead to greater agreement with internal auditor recommendations, improvements in perceptions of report quality lead to greater implementation of internal-auditor-recommended remediation strategies. Research limitations/implications: The operationalization of the manipulated variables of interest (communication mode, gender and root cause) may limit the generalizability of the study’s results. Practical implications: The paper includes managerial implications for internal auditors’ choice of communication mode and inclusion of a root cause in interim internal audit reports. Originality/value: This study provides evidence on the factors that could improve management’s perceptions of internal auditors’ work. The findings can help organizations, such as the Institute of Internal Auditors, to better understand how to address the needs of those who communicate with internal auditors.