TY - JOUR
T1 - Sourcing of internal auditing
T2 - An empirical study
AU - Speklé, Roland F.
AU - van Elten, Hilco J.
AU - Kruis, Anne Marie
PY - 2007/3
Y1 - 2007/3
N2 - 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.
AB - 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.
UR - http://www.scopus.com/inward/record.url?scp=33846894086&partnerID=8YFLogxK
U2 - 10.1016/j.mar.2006.10.001
DO - 10.1016/j.mar.2006.10.001
M3 - Article
AN - SCOPUS:33846894086
SN - 1044-5005
VL - 18
SP - 102
EP - 124
JO - Management Accounting Research
JF - Management Accounting Research
IS - 1
ER -