The internal auditing of corporate governance, risk management and ethics: comparing banks with other industries

This paper empirically tests whether the internal auditing function (IAF) in banks is more focused on corporate governance, risk management and ethics than it is in other industries. This study is grounded on theory triangulation, which involves agency, institutional and contingency theory. The results indicate that banks are more likely than other industries to devote auditing activities to corporate governance, risk management and ethics. With reference to risk management internal auditors in banks are more likely to cover the following areas of responsibility relating to risk: assurance on individual risks; assurance on risk management system as a whole and advice/consulting on risk management. As predicted, banks are more likely to have a corporate ethics policy (i.e., a code of ethics or conduct). Nevertheless, there is no significant difference between banks and other industries regarding the amount of ethics-related auditing.