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The development of internal auditing in Ethiopia: the role of institutional norms

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  • Dessalegn Getie Mihret
  • Joseph M. Mula
  • Kieran James

Abstract

Purpose - The purpose of this paper is to examine the extent to which institutional norms determine attributes of internal audit practices and how institutional changes explain the development of these practices. Design/methodology/approach - The authors employed a qualitative research approach based on archival analysis and interview evidence. Findings - Findings indicate that regulation‐based institutional norms explain the adoption of internal audit and the function's characteristics in Ethiopian organizations. Furthermore, innovative introduction of internal audit practices originate within individual organizations and eventually get institutionalized through diffusion. Such innovations are associated with organizational size, top management characteristics, internal audit advancement in technology, and exogenous input from the external environment. Widely accepted internal audit practices, as institutional norms, are not always taken‐for‐granted at the level of individual organizations. The institutional change perspective enables explaining how new internal audit approaches are introduced to supplant old ones. Originality/value - This study theorizes the development of internal audit practices from an institutional change perspective. Being the first study to do so, it contributes to the understanding of key drivers of institutional change that initiate new institutional norms that foster the development of internal audit through introduction and diffusion of new audit practices as old ones are deinstitutionalized.

Suggested Citation

  • Dessalegn Getie Mihret & Joseph M. Mula & Kieran James, 2012. "The development of internal auditing in Ethiopia: the role of institutional norms," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 10(2), pages 153-170, October.
  • Handle: RePEc:eme:jfrapp:v:10:y:2012:i:2:p:153-170
    DOI: 10.1108/19852511211273705
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    References listed on IDEAS

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    1. Mazlina Mat Zain & Nava Subramaniam, 2007. "Internal Auditor Perceptions on Audit Committee Interactions: a qualitative study in Malaysian public corporations," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 894-908, September.
    2. Gendron, Yves & Bedard, Jean, 2006. "On the constitution of audit committee effectiveness," Accounting, Organizations and Society, Elsevier, vol. 31(3), pages 211-239, April.
    3. Dessalegn Getie Mihret & Getachew Zemenu Woldeyohannis, 2008. "Value-added role of internal audit: an Ethiopian case study," Managerial Auditing Journal, Emerald Group Publishing, vol. 23(6), pages 567-595, June.
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