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- Title
Fraud Reporting within an Organization and the Use of the Internal Audit Function as a Training Ground for Management.
- Authors
Brink, Alisa G.; Eller, C. Kevin; Green, Karen Y.
- Abstract
This study examines the effects of using the internal audit function as a management training ground (MTG) and fraud magnitude on internal fraud reporting decisions. Two experiments examine (1) internal auditors' reporting behaviors, and (2) other employees' willingness to report directly to internal audit. In the first experiment, experienced internal auditors indicate that the use of internal audit as a MTG may negatively impact fraud reporting likelihood by internal auditors to the Chief Audit Executive (CAE). Further, using the internal audit function as a MTG inhibits the sense of urgency internal auditors feel to report large fraudulent acts. The second experiment compares management accountants' preferences for reporting to an anonymous third-party hotline versus reporting directly to internal audit. The results indicate a preference for the hotline that increases with a MTG. This preference is fully mediated by the perceived trustworthiness of internal audit, which is negatively impacted by a MTG. Data Availability: Contact the authors.
- Subjects
INTERNAL auditing; TRAINING of executives; INTERNAL auditors; MANAGEMENT accountants; CHIEF executive officers
- Publication
Behavioral Research in Accounting, 2022, Vol 34, Issue 1, p1
- ISSN
1050-4753
- Publication type
Article
- DOI
10.2308/BRIA-2020-015