Sourcing of internal auditing: An empirical study

Roland F. Speklé*, Hilco J. van Elten, Anne Marie Kruis

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

42 Citations (Scopus)


This paper studies the factors associated with organizations' internal audit sourcing decisions, building from a previous study by Widener and Selto (henceforth W&S) [Widener, S.K., Selto, F.H., 1999. Management control systems and boundaries of the firm: why do firms outsource internal audit activities? J. Manage. Account. Res. 11, 45-73]. In their study, W&S used Transaction Cost Economics (TCE) to explain the governance of internal auditing. Our study seeks to replicate their results, using newly collected data from 66 companies headquartered in the Netherlands. Our findings are supportive of W&S. Like W&S, we find asset specificity and frequency (both individually and in interaction) to be significantly associated with sourcing decisions. These findings are robust against different model specifications, and they hold across variously defined samples. We conclude that the W&S results are reproducible in different conditions, enhancing the credibility of the TCE-based explanation of organizations' internal audit sourcing practices.

Original languageEnglish
Pages (from-to)102-124
Number of pages23
JournalManagement Accounting Research
Issue number1
Publication statusPublished - Mar 2007


Dive into the research topics of 'Sourcing of internal auditing: An empirical study'. Together they form a unique fingerprint.

Cite this