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BEHAVIORAL RESEARCH IN ACCOUNTING Vol. 24, No. 1 2012 pp.

123

American Accounting Association DOI: 10.2308/bria-50023

Chief Audit Executives Assessment of Internal Auditors Performance Attributes by Professional Rank and Cultural Cluster
Mohammad J. Abdolmohammadi Bentley University
ABSTRACT: This study explores chief audit executives perceptions of the most important performance attributes of internal auditors by professional rank and cultural cluster. A large sample of chief audit executives (CAEs) from 19 countries located in five different cultural clusters was surveyed by the Institute of Internal Auditors Research Foundation (CBOK 2006). Analysis of data generated by that survey indicates that while leadership attributes (e.g., negotiating) are perceived to be most important for upper ranks in internal auditing, technical skills (e.g., analytical) are most important for lower ranks. Also, based on the cultural relativism literature, I hypothesize and find evidence that the importance of performance attributes differs significantly by cultural cluster. For example, while Latin-American CAEs rated leadership attributes at higher levels than other cultural clusters for internal audit staff, the East-European chief audit executives assessed the importance of technical skills at higher levels than other clusters. The results of the survey provide important initial empirical support to the list of ideal and desirable performance attributes for internal auditors recently developed by the Institute of Internal Auditors (IIA 2009). Keywords: internal auditor attributes; professional rank; culture. Data Availability: The source of data used in this study is CBOK (2006) from the Institute of Internal Auditors Research Foundation.

INTRODUCTION

his study explores chief audit executives (CAE) perceptions of the most important performance attributes of internal auditors by professional rank and cultural cluster. To date, few other studies have investigated this issue, and those that do focus on objectivity

This paper has beneted greatly from helpful comments by two anonymous reviewers and the editor, Theresa Libby. Also, comments by Audrey Gramling, Allen Hartt, Alan Reinstein, Gerrit Sarens, participants at the 2010 annual meetings of the American Accounting Association (particularly the discussant, Gary Braun), the Midwest Regional meeting of the American Accounting Association (particularly the discussant, Nathan Stewart), and the European Accounting Association were helpful in revising the paper. The source of data for the study is the Common Body of Knowledge (CBOK) in Internal Auditing database. The Institute of Internal Auditors Research Foundation (IIARF) developed CBOK in 20062007, and the author was a member of the research team that helped with its development. The author is grateful to the numerous anonymous internal auditing professionals who participated in the study, and the IIARF for its permission to use the database.

Published Online: December 2011

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alone (e.g., Brody and Lowe 2000; Schneider 2003; Ahlawat and Lowe 2004). A reason for this dearth of information may have been lack of data in the past. The development of the CBOK (2006) database by the Institute of Internal Auditors Research Foundation (IIARF) in recent years provides a unique opportunity to identify important performance attributes for internal auditing. This database is used in the current study. This study has three objectives. The rst is to document the perceived most important performance attributes for the practice of internal auditing. An early study in external auditing argues that knowledge of detailed performance attributes can assist in, among other things, designing decision aids, developing training programs, specifying guidelines for hiring, and establishing procedures for employee evaluation/promotion (Abdolmohammadi and Shanteau 1992). A similar argument can be made for the importance of documenting detailed performance attributes for the practice of internal auditing. Knowledge of these performance attributes can also be useful for behavioral research. For example, the results of the study can help behavioral researchers by providing them with various performance attributes, such as leadership attributes, that may be needed to perform at the CAE level. Behavioral studies that focus on designing training programs to enhance various performance attributes can also benet from consulting the list of perceived important attributes for various professional ranks of internal auditors. This objective is particularly important in the post Sarbanes-Oxley Act (SOX, U.S. House of Representatives 2002) era, when understanding of performance attributes can help companies to improve systematically the quality of their internal audit practice. Before the SOX (2002) legislation, internal audit functions engaged in extensive outsourcing of certain internal audit activities, such as EDP audit expertise (Abbott et al. 2007). This is because outsourcing was perceived to be an efcient way to improve the quality of both internal and external audits (IIA 1994). However, to improve external auditor independence, SOX (2002) Section 201 prohibited outsourcing of internal audit activities to incumbent external auditors. Concurrently, SOX (2002) Section 404 increased management responsibility for effective internal controls, thus increasing the role of the internal audit function to assess internal control effectiveness. While internal audit functions are not prohibited from outsourcing their internal audit activities to parties other than their external auditors in the post-SOX (2002) era, many companies have chosen to improve their own internal audit capabilities to reduce the extent of outsourcing. The CBOK (2006) database indicates that by 2006, the majority of the worldwide companies in the database, 68.8 percent, outsourced only 10 percent or less of their internal audit activities. The second objective of the current study is to provide evidence of differences in important performance attributes by various professional ranks. In external auditing, the literature suggests that, generally, technical skills are more important for lower professional ranks, while leadership attributes are more important for higher professional ranks (Bhamornsiri and Guinn 1991; Emby and Etherington 1996; Tan and Libby 1997). Understanding these differences in internal auditing can assist behavioral research targeted to staff training and job assignments in internal auditing. Specically, while technical skills can be targeted for training of lower ranks, leadership attributes can be targeted for training at the internal audit manager and CAE levels. As Solomon and Shields (1995) have observed, one of the objectives of behavioral research in auditing is training enhancement. Like external auditing, performance attribute differences by rank can also be expected in internal auditing, but the nature of the variation may be different. This is due to some similarities (e.g., similar audit techniques) but also major differences in practice between internal and external auditing. Richards (2005) summarizes differences in areas of standards (IIA versus PCAOB standards), audit approaches (e.g., customized versus risk based), independence (within organization objectivity versus organizational independence for external auditors), audit results (recommendation/facilitation versus audit opinion), internal control assessment (full internal control
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Chief Audit Executives Assessment of Internal Auditors Performance Attributes

assessment versus opinion on managements assessment of internal controls), fraud risk assessment (investigation of all kinds of fraud versus nancial fraud), and follow-up (continuous to correct weaknesses versus follow-up as a part of the next audit). These differences raise a question as to whether or not the results of studies in external auditing generalize to internal auditing. For example, while external auditors must have detailed knowledge of the PCAOB standards for their nancial audits, internal auditors must have detailed knowledge of the IIA standards as well as the PCAOB standards (especially as they relate to assessment of the system of internal controls) to perform their internal audits. The nal objective of this study is to investigate differences in performance attributes by cultural clusters. Prior studies of performance attributes in external auditing, and a few studies of objectivity in internal auditing, have been conducted in a single country context. The availability of data from various countries in the CBOK (2006) database makes it possible to extend the literature to multiple countries in various cultural clusters. Hofstedes (1980; 2001) cultural relativism theory suggests that professional judgment is inuenced by ones cultural background. Since the practice of internal auditing requires various professional judgments, the importance of performance attributes is expected to be inuenced by culture. Following Gray (1988), a number of studies have documented the effects of culture on the development of accounting as a profession and have reported differences between cultures. For example, Doupnik and Salter (1995) tested the effects of culture on the development of international accounting and found culture to have an effect. More recently, Doupnik (2008) demonstrated cross-national differences in earnings management due to cultural differences, and Tsakumis (2007) found that Greek accountants are less likely to disclose information than U.S. accountants. In the current study, guidance is used from a study of 62 societies (called the GLOBE Study) by House et al. (2004) to classify 19 countries into ve distinct cultural clusters of Anglo-Saxon, East-European, Germanic-Europe, Latin-American, and Latin-European. The effects of this classication on various performance attributes are then investigated. A large sample of CAEs in the current study assessed 18 of a list of 43 attributes as the most important performance attributes for the practice of internal auditing. Through factor analysis, these attributes were classied into leadership attributes (e.g., negotiating) and technical skills (e.g., analytical). The results indicate that while leadership attributes are more important for upper ranks, technical skills are more important for lower ranks. Further analysis reveals signicant differences by cultural cluster. For example, while Latin-American CAEs rated leadership attributes at higher levels than other cultural clusters for staff, the East-European CAEs assessed the importance of technical skills at higher levels than other clusters for CAEs. More details of these results are provided in the rest of the paper. The rest of the paper reviews the background literature and develops the studys research questions and hypothesis. This is followed by the Method section, which describes the source of the data. Analyses of the data are provided in the Results section, followed by a summary and a number of conclusions from the study in the nal section. BACKGROUND LITERATURE, RESEARCH QUESTIONS, AND HYPOTHESIS Performance Attributes Performance attributes are a collection of behavioral skills (e.g., leadership), technical skills (e.g., data collection and analysis), and competencies (e.g., communication skills) that are needed for auditors to perform their tasks effectively and efciently. Early research (e.g., Bonner and Lewis 1990; Libby 1995; Libby and Luft 1993; and Libby and Tan 1994) provides evidence on attributes such as ability, knowledge, and experience as determinants of superior performance in external auditing.
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External auditing research also suggests that as auditors move higher in their professional ranks, they achieve improvements in efciency and effectiveness in their performance (Salterio 1994). Wright (2001) adds that auditors judgment performance improves by achieving higher levels of professional rank. Abdolmohammadi (2008) reports that, except for innate attributes (e.g., intelligence), the possession of performance attributes generally increases with professional rank in external auditing. Other studies in external auditing (e.g., Abdolmohammadi and Shanteau 1992; Libby and Tan 1994; Tan 1999; Abdolmohammadi et al. 2004) have proposed performance attributes that were not widely considered previously, including leadership attributes such as management of self, others, and career (called tacit managerial knowledge), which Tan and Libby (1997) found to be important to external auditing. Finally, from a study of industry audit specialists, Abdolmohammadi et al. (2004) identied a detailed list of performance attributes for external auditors. Their nding indicates the importance of knowledge, leadership, technical skills, and communication skills for the practice of external auditing. Most Important Performance Attributes of Internal Auditors While there have been numerous studies of performance attributes in external auditing, only a few studies have addressed performance attributes in internal auditing, and the focus of these studies has been limited to objectivity. For example, Brody and Lowe (2000) discuss the implications of the evolving roles of internal auditors for their objectivity. Schneider (2003) presents empirical data on whether incentive compensation and stock ownership affect internal auditors objectivity, and Ahlawat and Lowe (2004) compare objectivity in internal auditing between functions that are retained in-house versus those that are outsourced. Other differences in practice between external and internal auditing may result in differences in importance of attributes between the two types of auditing. For example, while the basic audit skill set is the same for internal and external auditing, these auditing contexts are subject to the use of a different mix of standards (i.e., PCAOB standards for external auditing as compared to both PCAOB and IIA standards for internal auditing). The Internal Auditor Competency Framework (IIA 2009) is a list of performance attributes for internal auditors that the Institute of Internal Auditors calls ideal and desirable. The framework is presented as the minimum level of knowledge and skills needed to effectively operate and maintain an internal audit function (IIA 2009). Compiled by subject matter experts and volunteers, the competencies and rankings [in this framework] were developed by a global task force (IIA 2009); however, there is no indication that the task force collected or analyzed systematic data to support the framework. The IIA framework organizes performance attributes into four classes: interpersonal skills, tools and techniques, internal audit standards, and knowledge areas. These general categories are further divided into subcategories and then into very detailed attributes. For example, interpersonal skills contain subcategories of communication, management, leadership, conict management, team capabilities, collaboration, and cooperation skills. These subcategories then list more detailed competencies. For example, the subcategory of communication skills contains a number of detailed competencies such as Can communicate clearly with senior executives and board-level individuals (IIA 2009). The current study addresses the frameworks subcategory level through the following research question. RQ1: What are the most important performance attributes of internal auditors? Important Attribute Differences by Professional Rank The literature reviewed earlier (e.g., Salterio 1994; Tan and Libby 1997; Wright 2001; Abdolmohammadi 2008) suggests that while the importance of leadership attributes increases with
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Chief Audit Executives Assessment of Internal Auditors Performance Attributes

professional rank, the importance of technical skills decreases by professional rank.1 As discussed earlier, while there are similarities, there are also major differences between internal auditing and external auditing. The differences are likely to result in differences in the importance of performance attributes. However, the direction of these differences is unclear. Thus, I present an exploratory research question as follows: RQ2: Does the importance of performance attributes differ by internal auditors professional rank? Effects of Culture on Performance Attributes The theory of cultural relativism advanced by Hofstede (1980) and rened by Hofstede (2001) and House et al. (2004) posits that cultural differences have signicant effects on the development and operations of various professional practices that rely on professional judgment. Hofstede (1980) proposed the theory, which he used later to classify 50 countries into various cultural clusters (Hofstede 1983). House et al. (2004) extended Hofstedes work by classifying 62 societies into various cultural clusters. As detailed in the Method section, House et al.s (2004) results are used to identify the countries in the current study into ve distinct cultural clusters. Based on Hofstedes (1980) work, Gray (1988) argued for the relevance of cultural relativism to the development of the accounting profession in various countries. Grays work has motivated a number of studies that have found the development of international accounting to be affected by culture (Doupnik and Salter 1995) and have explained differences in nancial reporting practices in 29 countries (Salter and Niswander 1995). Tsakumis (2007) reports that national culture plays a role in accountants disclosure judgments, and investigating cross-national differences in earnings management, Doupnik (2008) and Braun and Rodriguez (2008) report signicant effects for cultural differences on earnings management in various countries. Extending this literature to internal auditing, Abdolmohammadi and Tucker (2002) show that the development of internal auditing as a profession is associated with a number of variables, including culture. However, very little literature has developed on the effects of culture on the practice of internal auditing. Thus, the literature on the development of the accounting profession as summarized above is used as a guide to extend this literature to internal auditing, where IIA afliates (now called institutes) are located in over 100 countries (IIA 2008). In the current study, cultural clusters are used to investigate the effects of culture on perceived importance ratings of performance attributes of internal auditors. Because setting up a specic hypothesis for each attribute by culture will result in a long list of hypotheses, only one general hypothesis is stated here to be tested at the factor level (i.e., leadership attributes and technical skills) and at the individual attribute level by professional rank. H1: Importance of performance attributes of internal auditors will differ by cultural cluster. RESEARCH METHOD The source of data for this study is the IIAs CBOK (2006) database. This database contains responses from internal auditors of varying ranks practicing in over 100 countries. The IIARF developed this database in 2006 as a comprehensive study of the current state of the internal
1

The decreasing level of importance does not mean lack of possession of these attributes. As Abdolmohammadi (2008) nds in external auditing, the possession of these attributes may stay the same as one moves up the professional ranks. However, the importance of these attributes to perform at the high professional ranks will be lower than leadership attributes.

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auditing profession worldwide. The data collected range from personal attributes of internal auditors (e.g., education), to the characteristics of their organizations (e.g., number of employees), to the internal and external quality assessment of the internal audit function. Included are data on 43 performance attributes of internal auditors. While CBOK (2006) has no data on cultural cluster classication, House et al. (2004) identify various cultural clusters for 62 societies. Matching data from CBOK (2006) and House et al. (2004), the current study identied 19 countries that could be classied into ve distinct cultural clusters for investigation. Specically, two criteria were used to select countries from CBOK (2006) for the current study. First, the country to be selected had to be clearly identied with a specic cultural cluster by House et al. (2004). House et al. (2004) have cultural classications for 62 societies, where a given country can have two or more cultural clusters. For example, Canada has both Anglo-Saxon and French societies, and Switzerland has both French and Germanic societies. Because CBOK (2006) does not distinguish cultural clusters within countries, the multi-society countries were not included in this study. Second, to be included a cultural cluster had to be represented by at least ten observations in the CBOK (2006) database so as to have sufcient data for statistical analysis. The resulting sample used in this study consists of 1,497 responses from CAEs in 19 countries classied into ve distinct cultural clusters. Table 1 presents a summary of the sample groups by cultural cluster and country. The Anglo-Saxon cluster has the largest number of CAE responses with 913 observations, while the East-European cluster has only 58 responses. Within various clusters, Venezuela, with seven responses, has the smallest sample size, and the U.S., with 760 responses, has the largest sample size. DATA ANALYSIS Demographic Data Table 2 contains demographic information, where analysis of variance (ANOVA) is used to test differences by cultural cluster for continuous variables (e.g., CAE age), and the v2 test is used for tests of differences in discrete variables (e.g., graduate/undergraduate education). The results indicate that, overall, the subjects had an average age of 45.37 years with a low of 37.37 years for Eastern Europe, and a high of 46.95 for Germanic Europe. The differences are highly signicant, with F 17.21, p , 0.001. The CAEs from Eastern Europe also had the lowest years of experience as CAE (4.36 years) and Germanic Europe had the highest number of years (8.73 years), where the ANOVA indicated highly signicant differences (F 10.27, p , 0.001). As shown in the last column of Table 2, other demographic variables also indicate signicant differences by cultural cluster. This includes both continuous and discrete variables. For example, Table 2 shows that, overall, 54 percent (46 percent) of the CAEs had been members of the IIA for six years or more (ve years or less) with Anglo-culture countries having the largest percentage (63.4 percent) and Eastern Europe having the lowest (20.7 percent), where the differences are highly signicant (v2 119.27, p , 0.001). Table 2 also presents the size of the internal audit function of the participating CAEs. A size of 03 professionals indicates that some internal audit functions may have had only a part-time position, or a combination of part-time and full-time positions. Overall, 39.7 percent of the participants were from internal audit functions with 3 or fewer internal auditors, 39.8 percent were from internal audit functions of 412 professionals, 9.5 percent were from functions with 1324 professionals, leaving 11.0 percent of participants from large audit function of 25 or more professionals. The differences by cultural cluster are highly signicant (v2 35.78, p , 0.001). The nal item in Table 2 presents data on the size of the CAEs organizations in terms of the number of
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Chief Audit Executives Assessment of Internal Auditors Performance Attributes

TABLE 1 Cultural Clusters and Countries in the Sample


Cultural Cluster Anglo-Saxon Countries Australia New Zealand UK/Ireland United States Cluster Total Poland Russia Cluster Total Austria Germany The Netherlands Cluster Total Argentina Brazil Colombia Costa Rica Mexico Venezuela Cluster Total France Italy Portugal Spain Cluster Total Grand Total Sample Size 72 13 68 760 913 8 50 58 57 40 26 123 13 11 25 16 24 7 96 69 129 14 95 307 1,497

Eastern Europe

Germanic Europe

Latin America

Latin Europe

full-time equivalent employees. As expected, there is much variation in size between various cultural clusters. Analysis of the Importance of Attributes by Professional Rank (RQ1 and RQ2) CAEs were provided with a list of 43 attributes to select the most important ones in each of the three categories of behavioral skills, technical skills, and competencies for each of four professional ranks (staff, senior/supervisor, manager, and CAE). Behavioral Skills Behavioral skills cover a wide range of attributes such as facilitating, communication skills, and leadership. Twelve behavioral attributes were listed in CBOK from which CAEs picked the ve most important attributes for the practice of internal auditing at various professional ranks. Table 3, Panel A presents the results. The behavioral attributes that were selected by at least 50 percent of CAEs for at least one of the professional ranks are bolded in Table 3. This analysis identies eight attributes (condentiality, governance and ethics sensitivity, interpersonal skills, leadership,
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TABLE 2 Sample Characteristics by Cultural Cluster (Mean [Std. Dev.] for Continuous Variables and Percentages for Discrete Variables)
Cultural Cluster Demographic Variable CAE Age (years) Years as CAE AngloEast Germanic Latin Latin Saxon European Europe American European 46.21 (8.44) 6.94 (6.46) 14.04 (9.80) 37.37 (6.74) 4.36 (2.69) 5.60 (3.52) 79.3% 20.7% 27.6% 43.1% 13.8% 46.95 (8.14) 8.73 (7.07) 11.94 (7.90) 38.5% 61.5% 70.7% 55.3% 39.0% 43.21 (7.56) 7.50 (5.98) 13.51 (10.63) 69.1% 30.9% 42.7% 88.5% 30.2% 44.49 (8.08) 5.28 (4.87) 7.95 (5.70) 63.5% 36.5% 39.1% 38.8% 24.4% Total 45.37 (8.45) 6.69 (6.16) 12.26 (9.26) 46.0% 54.0% 41.2% 65.2% 39.9% Statistic (Sig.) F 17.21 (, 0.001) F 10.27 (, 0.001) F 33.97 (, 0.001) v2 119.27 (, 0.001) v2 51.99 (, 0.001) v2 169.27 (, 0.001) v2 75.71 (, 0.001)

Years of Internal Audit Experience Years of IIA Membership: 5 or less 36.6% 6 or more 63.4% % Having Graduate Ed. 38.6% % Having AC/AU/IA 74.4% major % Having CIA Cert. or 48.0% Equivalent Size (fulltime IA professionals): 0003 43.0% 0412 38.9% 1324 8.9% 25 or more 9.2% Size (full-time employees): 500 or less 27.7% 5015000 44.9% 5001 or above 27.4%

35.7% 42.9% 16.1% 5.4% 41.1% 35.7% 23.2%

47.0% 35.7% 6.1% 11.3% 30.8% 42.5% 26.7%

22.3% 46.8% 14.9% 16.0% 48.4% 37.9% 13.7%

33.3% 41.2% 9.9% 15.6% 22.1% 44.1% 33.8%

39.7% 39.8% 9.5% 11.0% 28.6% 43.7% 27.6%

v2 35.78 (, 0.001)

v2 34.13 (, 0.001)

objectivity, team player, working independently, and working well with all levels of management) as the most important behavioral attributes. As reported in the last column of Table 3, the Cochran test shows differences by professional rank for all behavioral attributes in the table (not just those perceived by a majority of CAEs as most important) at high levels of signicance.2 For example, leadership was identied by 78 percent of CAEs as a most important attribute for CAEs. In comparison, most important ratings of leadership provided by CAEs were 47 percent for internal audit managers (IAMs), 20 percent for seniors/ supervisors, and only 3 percent for staff. These differences by rank were highly signicant (Cochrans Q 1,872.34, p , 0.001). The attributes of team player and working independently are viewed as more important for lower professional ranks than upper ranks. As bolded in Table 3, of
2

The Cochran test is a substitute for the Chi-square test in situations where the responses are not independent. Since CAEs concurrently made judgments about the importance of attributes for the four professional ranks, the Cochran test of related samples was used to investigate differences in importance of each attribute by professional rank.

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the 12 attributes listed, 8 were selected by at least 50 percent of CAEs as important for at least one of the professional ranks. Technical Skills Panel B in Table 3 shows CAEs assessment of 13 technical skills, 6 of which were selected by at least 50 percent of CAEs for at least one of the professional ranks (bolded in the table). They are data collection and analysis, identifying types of controls, interviewing, negotiating, risk analysis, and understanding business. The statistical analysis shows signicant differences by professional rank for all but one attribute, nancial analysis, where the Cochran Q is only 2.52 and not statistically signicant at conventional levels. The ratings for this attribute are all in the 30 percent range, thus it was not selected as one of the most important attributes. Also, for some skills, the importance increases by professional rank (e.g., risk analysis, negotiating, and understanding business), while for other skills (mostly technical skills), it decreases by professional rank (e.g., data collection and analysis, interviewing, identifying controls). Competencies CBOK listed 18 competencies from which CAEs identied the 5 as the most important for each professional rank. As bolded in Table 3, Panel C, ve competenciesability to promote the internal audit in organization, analytical ability to work through an issue, communication, and writing skillswere identied (bolded in the table) by at least 50 percent of CAEs as important for at least one of the professional ranks. The Cochrans Q statistic shows highly signicant differences by professional rank for all 18 competencies at the 0.004 level. Also, the results show that while importance increases by professional rank for ability to promote internal auditing in the organization, for analytical ability and writing skills, the importance decreases by professional rank. An anomaly in Table 3 is that while communication is indicated as more important at the staff and CAE levels, it is less important for senior/supervisors and internal audit managers. Overall Summary A total of 18 attributes were listed by at least 50 percent of CAEs as the most important attributes for at least one of the four professional ranks. These attributes provide evidence to address RQ1. Table 3 also shows that for 42 of the original 43 attributes, CAE ratings were signicantly different by professional rank, providing evidence on difference in perceived importance of performance attributes by professional rank (RQ2). Principal Components Factor Analysis (PCA) was performed to classify the 18 most important attributes into factors. For example, setting the number of desired factors at two, CAE perceptions of the most important attributes for staff were subjected to PCA analysis. Table 4 lists the resulting two factors that collectively explain 28.91 percent of the total variation in responses. Specically, Factor 1 accounts for 20.21 percent of variation, and Factor 2 accounts for 8.70 percent of the variation.3 The loading weights of the 18 attributes for each of the two factors are also presented in Table 4. Using the largest factor loadings of Factors 1 and 2 results in identication of 13 attributes in Factor 1 and 5 attributes in Factor 2. The 13 attributes in Factor 1 (condentiality, interpersonal skills, objectivity, team player, working independently, work with all levels of management, data collection and analysis, identifying types of controls, interviewing, understanding business, analytical, communication, and writing skills)
3

Expanding the number of factors to more than 2 may be viewed as desirable, where up to 18 factors can be driven. However, as evidenced by only 8.70 percent of variance explained by Factor 2 (as compared with 20.21 percent for Factor 1) in Table 4, each of the remaining 16 factors will explain a small single digit share of the total variance explained.

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TABLE 3 Percentage of CAEs Selecting Each Attribute as Most Important for Each Professional Rank (Bold Data Are Those that Indicate at Least 50 Percent CAE Selection for at Least One of the Four Professional Ranks) Panel A: Behavioral Skills
% of CAEs Selecting the Attribute as the Most Important Performance Attribute a. Condentiality b. Facilitating c. Governance and ethics sensitivity d. Interpersonal skills e. Leadership f. Objectivity g. Relationship building h. Staff management i. Team building j. Team player k. Working independently l. Work well with all levels of management Staff 73 11 22 69 3 75 28 2 6 67 57 42 Sr/Supr 56 26 20 50 20 54 24 30 30 35 26 35 IAM 52 32 28 45 47 43 32 44 39 17 15 43 CAE 69 35 52 50 78 56 47 36 33 13 16 59 Cochran Qa 316.73 270.39 627.04 269.25 1,872.34 379.35 259.73 690.83 477.26 1,302.40 852.86 208.40

Panel B: Technical Skills


% of CAEs Selecting the Attribute as the Most Important Staff a. Data collection and analysis b. Financial analysis c. Forensic skills/fraud awareness d. Identify types of controls (e.g., preventive, detective) e. Interviewing f. ISO/quality knowledge g. Negotiating h. Research skills i. Risk analysis j. Statistical sampling k. Total quality management l. Understanding business m. Use of information technology 78 34 20 55 60 5 7 45 26 28 2 45 49 Sr/Supr 34 35 31 44 45 7 24 31 40 20 8 43 37 IAM 14 34 39 33 36 13 50 19 59 8 17 60 29 CAE 13 36 41 30 36 16 73 20 78 5 30 83 27 Cochran Qa 1,607.80 2.52 209.38 248.71 240.67 164.46 1,530.79 337.46 956.28 435.98 597.99 758.97 254.53

(continued on next page)

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TABLE 3 (continued) Panel C: Competencies


% of CAEs Selecting the Attribute as the Most Important Staff a. Ability to promote IA in organization b. Analytical (ability to work through an issue) c. Change management d. Communication e. Conict resolution f. Critical thinking g. Conceptual thinking h. Foreign language skills i. Keeping up with standards and regulations j. Organization skills k. Presentation skills l. Problem identication and solution m. Project planning and management n. Report development o. Time management p. Training and developing staff q. Understanding complex information systems r. Writing skills
a b

Sr/Supr 9 47 6 42 19 32 16 7 21 22 14 33 24 28 27 19 14 34

IAM 27 29 17 46 33 25 20 9 30 26 23 22 36 24 17 39 14 25

CAE 79 24 34 62 41 31 38 11 41 29 37 21 25 12 14 30 11 24

Cochran Qb 2,140.61 660.23 670.31 181.60 573.30 202.28 282.85 30.84 255.59 17.17 414.86 310.82 349.07 125.40 438.73 611.68 13.23 397.83

8 66 4 50 6 47 18 11 19 25 10 46 7 20 42 2 14 52

Bold Cochran Qs are signicant at the 0.001 level. Bold Cochran Qs are signicant at the 0.004 level or lower.

encompass various skills for internal auditors, and thus can broadly be dened as technical skills. On the other hand, the ve attributes in Factor 2 (governance and ethics sensitivity, leadership, negotiating, risk analysis, and ability to promote the internal audit function) represent leadership abilities, and thus can be dened as leadership attributes. These factor classication names are consistent with that used in prior studies of external auditing. PCA analyses were also performed on the 18 attributes for senior/supervisors, IAMs, and CAEs. With some minor variations (e.g., communication was not a clear choice in some of the PCAs, indicating that communication is important to all professional ranks), the results were generally consistent with those for staff. Using the two factors identied, I calculated an aggregate importance rating scale, where CAE choices of the 13 technical skills and the 5 leadership attributes were totaled and then divided by the number of attributes in each factor (13 and 5, respectively) to calculate the means, standard deviations, and ranks of importance by professional rank. The results are presented in Table 5, where the Kendall test of k-related samples is used to analyze differences by rank. As reported in Table 5 and depicted in Figure 1, the importance of leadership attributes increases with professional rank (Kendall-W 0.659, p , 0.001). These results provide evidence to address RQ2. Table 5 and Figure 1 also show that for the technical skills factor, the importance ratings decrease by professional rank up to the rank of IAM, and then slightly reverse (i.e., become more important) for CAEs. The statistically signicant results suggest that technical skills are more important for the lower professional ranks than for upper ranks (Kendall-W 0.333, p , 0.001). These results provide additional evidence to address RQ2.
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TABLE 4 Factor Loadings for the Most Important Performance Attributes Identied by CAEs for Staff
Factor Attribute Condentiality Governance and ethics sensitivity Interpersonal skills Leadership Objectivity Team player Working independently Work well with all levels of management Data collection and analysis Identifying types of controls (e.g., preventative, detective) Interviewing Negotiating Risk analysis Understanding business Ability to promote the internal audit function Analytical (ability to work through an issue) Communication Writing skills Variance Explained 1 Technical Skills 0.579 0.128 0.541 0.081 0.643 0.465 0.407 0.286 0.701 0.478 0.534 0.153 0.251 0.400 0.121 0.609 0.497 0.476 20.21% 2 Leadership Attributes 0.005 0.362 0.211 0.574 0.007 0.178 0.244 0.237 0.136 0.001 0.106 0.498 0.536 0.211 0.539 0.067 0.028 0.094 8.70%

Effects of Culture on Performance Attributes (H1) To test for the relationship between cultural clusters and performance attributes, the leadership attributes and technical skills factors identied in the previous section were analyzed by cultural clusters, using the analysis of variance (ANOVA) for each of the four professional ranks. The results are reported in Table 6, where factor means (i.e., mean proportions of CAEs selecting the attributes in each factor) are presented along with their standard deviations and rank orders, and those that are signicantly different from the overall means are bolded. Viewed vertically, Table 6 shows that for each cultural cluster the importance of leadership attributes increases by professional rank, while the importance of technical skills decreases by professional rank up to the IAMs, where it reverses and becomes more important for CAEs. This nding is consistent with the analysis reported earlier in Table 5 and Figure 1. Viewed horizontally, the data in Table 6 show highly signicant differences between cultural clusters for both leadership attributes and technical skills. Specically, the ANOVA analysis of leadership attributes for staff has an F-statistic of 25.20, which is highly signicant at the 0.001 level. In comparison to the overall aggregate importance rating of 13.12, the rating for the LatinAmerican cluster of 26.82 is the highest among cultural clusters, indicating that the importance rating for the leadership attributes for staff is greater for the Latin-American cluster than for any other cluster. The same can be said for Seniors/Supervisors (F 12.61, p , 0.001), for whom 36.94 percent of Latin-American CAEs selected leadership attributes as most important, which is signicantly greater than the overall aggregate rating of 22.56. For managers, Latin-American CAEs assigned the highest rating of 56.24, while the CAEs from Germanic-Europe (33.98)
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TABLE 5 Leadership Attributes versus Technical Skills (Mean Proportions of CAEs Selecting Attributes with Their Standard Deviations and Rank Orders)
Staff a. Leadership Attributes (Standard Deviation) Mean Rank b. Technical Skills (Standard Deviation) Mean Rank
a

Sr/Supr 22.56 (23.17) 1.95 41.91 (27.18) 2.44

IAM 42.18 (30.87) 2.74 35.37 (24.17) 1.80

CAE 71.89 (25.64) 3.73 46.21 (18.54) 2.32

Kendall W-Statistic

13.12 (17.49) 1.58 60.63 (24.29) 3.43

0.659a

0.333a

Signicant at the 0.001 level.

assigned the lowest ratings. Overall, these differences were highly signicant (F 8.11, p , 0.001). A similar result is observed for the importance rating of leadership attributes for CAEs, where the Germanic-Europe cluster rating is the lowest (67.18) and the Latin-American cluster is the highest (75.06) as compared with the overall rating of 71.89 (F 3.25, p 0.012). For technical skills, no signicant difference between cultural clusters was indicated for Senior/ Supervisors (F 1.49, p 0.202), and the difference for managers was signicant at the marginal level of 0.064 (F 2.22). However, the differences in importance ratings by cultural cluster were signicant for staff (F 9.26, p , 0.001) and CAEs (F 2.86, p 0.023). The result for staff indicates that the East-European rating (51.42) is signicantly below the overall mean of 60.63. Finally, the importance ratings of technical skills for CAEs in the East-European cluster (50.85) are signicantly greater than the overall rating of 46.21. In summary, Table 6 shows that while Anglo-Saxon and Latin-European CAEs ratings did not differ signicantly from the overall ratings, East-European, Germanic-Europe, and Latin-American FIGURE 1 Attribute Importance by Professional Rank

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TABLE 6 Performance Attribute Factor Ratings by Cultural Cluster (Proportions of CAEs Selecting the Attributes within Each Factor)
LatinLatinGermanic EastOverall American European Europe F-Statistic Anglo-Saxon European n 263 n 1,329a (Signicance) n 85 n 103 n 54 n 824 19.26 18.52 37.41 68.52 12.82 23.88 33.98 67.18 26.82 36.94 56.24 75.06 16.81 25.78 46.01 75.89 13.12 22.56 42.18 71.89 25.20 (, 0.001) 12.61 (, 0.001) 8.11 (, 0.001) 3.25 (0.012) 9.26 (, 0.001) 1.49 (0.202) 2.22 (0.064) 2.86 (0.023)

Factor

Leadership Attributes of: Staff 10.17 Sr./Supr. Manager CAE 20.15 40.85 71.09

Technical Skills of: Staff 63.55 Sr./Supr. Manager CAE 42.63 35.88 45.75

51.42 34.19 34.05 50.85

59.60 41.82 28.83 42.20

56.74 43.89 37.47 48.42

55.02 40.63 35.92 47.53

60.63 41.91 35.37 46.21

Bold numbers are signicant at the 0.05 level or lower. a The decrease in sample size to 1,329 observations from the original sample size of 1,497 observations is due to missing data.

clusters differed from overall ratings for some of the professional ranks. In a search for the source of these variations, an analysis by cultural cluster was performed for each of the ve attributes in the leadership attributes factor for each of the professional ranks. The results are reported in Table 7, where signicant differences are bolded. In the discussion that follows, two points about the ndings in Table 7 are summarized. The rst is the degree of cultural cluster effect on the results, where the v2 test and its signicance are reported for each attribute. The second point is that the cultural cluster that deviates the most from the overall importance ratings of attributes in either direction is bolded. Panel A of Table 7 shows that all of the ve leadership attributes for staff are signicantly different by cultural clusters (i.e., all v2 tests are highly signicant). As to the details of these differences, Table 7 shows that while the Anglo-Saxon ratings are not different from the overall ratings, other cultural clusters have some differences. For example, East-European CAEs rated governance and ethics at a higher level (57 percent) than other clusters, followed by LatinAmerican (46 percent) and Latin-European (30 percent) clusters. Differences were also observed for seniors/supervisors, IAMs, and CAEs. However, the number of signicant v2s decreases for higher ranks (i.e., more consensus is observed for higher ranks than for lower ranks). For example, of the ve attribute ratings for CAEs, four v2s were not signicant. Overall, 15 of the 20 comparisons (ve attributes times four professional ranks) were signicant. This result provides general support for H1 at the individual attribute level.
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The bolded largest deviations from the overall rating for each of the leadership attributes in Table 7 indicate that Anglo-Saxon CAEs ratings do not differ from the overall ratings for any of the 20 attribute comparisons (i.e., ve attributes times four professional ranks). The next lowest difference is observed for the Latin-European cluster with only one deviation (indicating higher importance rating for governance and ethics sensitivity for staff ). Table 8 presents the same analysis (as in Table 7) for the 13 technical skills. The results indicate that while 11 of the 52 v2s (13 attributes times four professional ranks) are not signicantly different across cultural clusters, the remaining 41 are. This result provides further support for H1 at the individual attribute level. Compared to the overall results, the Anglo-Saxon cluster does not show differences, while Latin-European shows ve differences. The East-European cluster has 19 signicant differences, while Latin-American cluster has the highest at 13 differences, followed by Germanic-Europe with 10 differences. Additional Analysis To investigate whether demographic variables had any effects on the main results, four logistic regressions (one per each professional rank) for each of the 18 attributes perceived as being most important by CAEs were performed for a total of 72 regressions. In each of the regressions, the selection of the attribute by CAEs was used as a binary dependant variable (yes/no). Independent variables were cultural cluster, where dummy variables were used for each cluster (cluster 1/other, cluster 2/other, etc.) and the demographic variables listed in Table 2 (except for the size of the organization that was highly correlated with the size of the internal audit function). The results of these numerous logistic regressions (not tabulated) provide support for the robustness of the ndings reported earlier because the Logits typically returned statistically signicant models with pseudo R2s of less than 10 percent, where at least one of the dummy variables for cultural cluster was statistically signicant. Also, while there were isolated signicant effects in some of the logistic regressions for some of the demographic variables (e.g., CAE age, CAE education level), they did not present a recognizable pattern of effects on CAE responses. The signicant differences by rank and cultural cluster, as reported earlier, suggest that there might be an interaction effect between cultural cluster and professional rank. An interaction effect would suggest that CAE choice of most important attributes for each professional rank is affected by the cultural cluster to which the CAE belongs. To test this interaction formally, I performed Logit regressions in which CAE selections of each of the 18 attributes (yes/no) were regressed against binary cluster variables (cluster 1/other, cluster 2/other, etc.), the professional rank variable (14 for staff, senior/supervisor, manager, and CAE), and their interactions. The results (not tabulated) indicate that all logistic regressions produce highly signicant v2 values at the p , 0.001 level. In all but one of these 18 regressions, at least one (and at most three) of the four cluster/rank interactions was signicant.4 The condentiality regression model was the exception in which the overall model was statistically signicant, but none of the interactions between cultural cluster and professional rank was signicant. The signicant interaction effects in 17 of the 18 models add further support to the conclusion that cultural cluster is associated with signicant differences in the CAE assessments of attribute importance for various professional ranks. Related to cultural cluster analysis is an observation in Table 2 indicating that CAEs in the East-European cluster had the lowest age, experience (both years as CAE and years of internal audit experience), and length of membership in the IIA than other four clusters. The East-European CAEs
4

The breakdown of interactions was as follows: 15 Cluster-1/rank interactions, 8 Cluster-2/rank interactions, 11 Cluster-3/rank interactions, and 2 Cluster-4/rank interactions. Adding Cluster-5 (yes/no) and its interaction with rank would be redundant to the model specication.

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TABLE 7 Leadership Attributes by Cultural Cluster (Proportions of CAEs Selecting Each Attribute in Each Cultural Cluster) Panel A: Staff
LatinLatinGermanic EastAngloOverall Saxon European Europe American European n 263 n 1,329a n 85 n 103 n 54 n 824 Governance and Ethics Sensitivity Leadership Negotiating Risk Analysis Ability to promote IA 15 2 6 22 7 57 0 9 30 0 18 1 13 23 10 46 14 7 49 18 30 2 9 34 9 22 3 7 26 8

v2 (Sig.) 103.81 (0.000) 46.15 (0.000) 9.74 (0.045) 42.64 (0.000) 17.23 (0.002)

Panel B: Senior/Supervisor
LatinLatinGermanic EastAngloOverall American European Europe Saxon European n 263 n 1,329a v2 (Sig.) n 85 n 103 n 54 n 824 Governance and Ethics Sensitivity Leadership Negotiating Risk Analysis Ability to promote IA 15 19 22 37 8 28 13 17 33 2 24 18 39 33 6 38 39 27 59 22 28 20 24 48 9 20 20 24 40 9 42.62 (0.000) 21.22 (0.000) 15.77 (0.003) 27.33 (0.000) 25.07 (0.000)

Panel C: Manager
LatinLatinGermanic EastAngloOverall American European Europe Saxon European n 263 n 1,329a v2 (Sig.) n 85 n 103 n 54 n 824 Governance and Ethics Sensitivity Leadership Negotiating Risk Analysis Ability to promote IA 21 49 50 60 25 24 44 43 52 24 27 31 40 47 25 48 61 55 68 48 43 45 50 61 31 28 47 50 59 27 70.40 (0.000) 19.07 (0.001) 6.34 (0.175) 11.34 (0.023) 24.43 (0.000)

(continued on next page)

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TABLE 7 (continued) Panel D: CAE


LatinLatinGermanic EastAngloOverall American European Saxon European Europe n 263 n 1,329a v2 (Sig.) n 85 n 103 n 54 n 824 Governance and Ethics Sensitivity Leadership Negotiating Risk Analysis Ability to promote IA
a

48 80 73 78 77

37 78 69 74 85

50 70 68 70 79

71 80 67 75 82

63 75 77 82 82

52 78 73 78 79

35.67 (0.000) 7.16 (0.128) 5.66 (0.226) 6.96 (0.138) 5.41 (0.248)

The decrease in sample size to 1,329 observations from the original sample size of 1,497 observations is due to missing data. Bold data highlight signicance.

also had the lowest percentage of graduate studies and professional certication than other clusters. Given these differences, I repeated the cultural difference analysis in Table 6 without the EastEuropean cluster to see if the inter-cultural differences reported earlier hold for the remaining four clusters. The results (not tabulated) were fully consistent with those reported in Table 6. Specically, all Leadership Attributes were highly signicant by cultural cluster. The same was true for technical skills, where the intercultural difference was not signicant for seniors/ supervisors, but the remaining three ANOVAs were statistically signicant. As Table 1 shows, sample sizes from Poland and Venezuela were in the single digits, causing concern about their sample limitations. Consequently, I dropped these 2 countries from the overall sample and analyzed the data based on the remaining 17 countries. With one exception, the results mirrored those reported in Table 6. The exception was that while the cultural cluster was signicant at the 0.023 for CAE technical skills in Table 6, it was not signicant in the analysis of the 17 countries that excluded Poland and Venezuela (p 0.125). The next analysis performed was on the effects of industry on CAE choices. Abdolmohammadi et al. (2004) argue that industry effect analysis has implications for the training and assignment of industry specialists to audit tasks. For example, depth of technical skills may be more important to industries with more likelihood of litigation (e.g., product safety in manufacturing) than those with less likelihood of litigation (e.g., utilities). While CBOK (2006) has data on 22 industries, sufcient sample sizes were available for only 10 industries (banks, education, nance, health, insurance, manufacturing, retail, technology, transportation, and utilities) in the current study for meaningful statistical analysis (i.e., at least ten observations per professional rank). CAE performance attribute ratings were analyzed by these 10 industries rst, and then by more-regulated (e.g., banks, utilities) versus less-regulated (e.g., manufacturing, retail) industry classication. The results (not tabulated) do not present a clear pattern of industry effects. For example, the more-regulated/less-regulated industry analysis indicated signicance for staff auditors in only 2 of the 18 performance attributes. These differences do not support broad generalizations.
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TABLE 8 Technical Skills by Cultural Cluster (Proportions of CAEs Selecting Each Attribute in Each Cultural Cluster) Panel A: Staff
LatinAnglo- Eastern- Germanic- LatinEurope American European Overall Saxon Europe n 263 n 1,329a v2 (Sig.) n 85 n 103 n 824 n 54 Condentiality Interpersonal skills Objectivity Team player Work independently Work well with management Data collection and analysis Identify types of controls Understanding business Interviewing Analytical Communication Writing skills 70 76 74 66 62 46 78 60 48 63 70 58 55 67 56 63 69 57 15 78 24 35 57 50 43 56 76 58 73 84 70 38 77 35 59 60 68 52 45 84 54 84 72 34 33 79 64 39 44 59 41 53 81 61 75 68 43 39 77 48 33 57 57 30 46 73 69 75 67 57 42 78 55 45 60 66 50 52 18.87 (0.001) 46.06 (0.000) 7.69 (0.104) 1.84 (0.765) 54.26 (0.000) 25.30 (0.000) 0.14 (0.989) 53.25 (0.000) 30.05 (0.000) 14.31 (0.006) 22.36 (0.000) 70.60 (0.000) 9.06 (0.060)

Panel B: Senior/Supervisor
LatinAnglo- Eastern- Germanic- LatinEurope American European Overall Saxon Europe n 263 n 1,329a v2 (Sig.) n 85 n 824 n 54 n 103 Condentiality Interpersonal skills Objectivity Team player Work independently 52 54 52 31 25 52 44 44 37 33 64 39 62 36 39 69 40 58 55 17 62 43 59 42 27 56 50 54 35 26 18.95 (0.001) 21.15 (0.000) 9.32 (0.054) 28.38 (0.000) 15.09 (0.005)

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TABLE 8 (continued)
LatinAnglo- Eastern- Germanic- LatinEurope American European Overall Saxon Europe n 263 n 1,329a v2 (Sig.) n 85 n 824 n 54 n 103 Work well with management Data collection and analysis Identify types of controls Understanding business Interviewing Analytical Communication Writing skills 40 36 44 47 45 47 46 39 15 30 32 26 32 37 32 32 26 28 37 41 52 52 40 27 33 33 59 41 38 55 38 35 29 30 45 39 49 45 32 27 35 34 44 44 45 47 42 34 25.53 (0.000) 5.63 (0.23) 13.25 (0.010) 13.15 (0.011) 9.95 (0.041) 6.44 (0.169) 18.82 (0.001) 10.93 (0.027)

Panel C: Manager
LatinAnglo- Eastern- Germanic- LatinEurope American European Overall Saxon Europe n 263 n 1,329a v2 (Sig.) n 85 n 824 n 54 n 103 Condentiality Interpersonal skills Objectivity Team player Work independently Work well with management Data collection and analysis Identify types of controls Understanding business Interviewing Analytical Communication Writing skills 49 51 41 12 13 49 14 32 63 37 28 50 28 46 44 44 26 22 28 26 41 52 33 43 19 19 56 33 44 11 16 29 13 29 45 31 21 37 11 64 35 55 39 18 38 12 38 55 25 39 44 27 57 34 47 27 19 33 14 38 60 42 31 44 21 52 45 43 17 15 43 14 33 60 36 29 46 25 10.96 (0.027) 34.82 (0.000) 8.53 (0.074) 6.34 (0.175) 7.71 (0.103) 36.99 (0.000) 6.91 (0.141) 6.63 (0.157) 16.23 (0.003) 10.35 (0.035) 12.83 (0.012) 25.13 (0.000) 20.55 (0.000)

(continued on next page)

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TABLE 8 (continued) Panel D: CAE


LatinAnglo- Eastern- Germanic- LatinEurope American European Overall Saxon Europe n 263 n 1,329a v2 (Sig.) n 85 n 824 n 54 n 103 Condentiality Interpersonal skills Objectivity Team player Work independently Work well with management Data collection and analysis Identify types of controls Understanding business Interviewing Analytical Communication Writing skills
a

64 54 51 9 11 65 11 27 86 39 21 67 26

67 54 69 24 28 87 33 32 78 33 39 35 37

75 40 63 7 18 54 12 34 70 34 21 44 13

79 47 64 35 25 47 20 29 78 26 37 59 26

76 40 64 22 26 41 14 39 84 40 27 62 19

69 50 56 14 16 59 13 30 83 36 24 62 24

19.69 (0.001) 20.78 (0.000) 22.84 (0.000) 5.66 (0.226) 48.29 (0.000) 71.52 (0.000) 25.38 (0.000) 14.78 (0.005) 20.59 (0.000) 6.32 (0.176) 19.34 (0.001) 38.66 (0.000) 17.11 (0.002)

The decrease in sample size to 1,329 observations from the original sample size of 1,497 observations is due to missing data. Bold numbers are signicant at the 0.05 level or lower.

SUMMARY AND CONCLUSIONS A large sample of chief audit executives (CAEs) from 19 countries located in ve different cultural clusters identied the most important performance attributes for the practice of internal auditing. The results show that while leadership attributes increase in importance by professional rank, technical skills generally decrease in importance by professional rank. The results also indicate that importance of performance attributes differs by cultural cluster. Robustness of the main results was conrmed through various multivariate analyses, where signicant interaction effects between cultural cluster and professional rank were found. However, industry-specic analysis indicated no pattern of industry differences for the vast majority of performance attributes. These results suggest that a generic prole for internal auditors, regardless of industry, may be in order. However, for a small minority of the attributes for which industry may have effects, industry-specic guidance may be appropriate. This conclusion suggests future studies of industry-specic effects for the purpose of developing industry-specic guidance. The IIAs (2009)
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Framework has no industry-specic guidance, and it has indicated that such information will be added when available. An interesting nding in the study is that attributes such as nancial analysis, research skills, and statistical sampling that have theoretical appeal to the practice of internal auditing were not selected by the CAEs as most important attributes. This result may be an artifact of limiting the selection of the attributes to the top ve from each category of behavioral, technical, and competencies. The differences may also be due to the effects of culture. For example, research skill was selected by only 45 percent of CAEs for staff, and even lower percentage for seniors/ supervisors, IAMs, and CAEs. However, an analysis by culture indicated that this attribute was selected by more than 50 percent of CAEs in East-European and Germanic-Europe clusters. These differences suggest that future studies may be needed to use scales (e.g., Likert scale, rank ordering) other than forced selection of the top ve attributes from each category to assess the importance of all attributes, not just those assessed as the most important. Another interesting result in the study is that governance and ethics sensitivity was rated to be more important for staff in Eastern Europe, but more important in Latin America for the other professional ranks. This evidence suggests that more research may be needed to investigate this attribute further to nd more specic reasons for the differences by cultural cluster. For example, future research may benet from investigating the association of specic cultural dimensions, such as uncertainty avoidance and power distance, with importance ratings of various performance attributes. The IIAs (2009) Internal Auditor Competency Framework was issued to provide guidance on detailed performance attributes and called for research data to develop the Framework further. According to the IIA (2009), the highly detailed competencies in the Framework represent the desirable and the ideal. The current study contributes evidence on some of the important attributes in the Framework. Additional research may be needed to investigate further these and other performance attributes to rene the Framework further. A limitation in the current study is CBOKs (2006) use of the survey method to collect data. While CAEs have experience and insight about the subject matter of the current study, the results may, nevertheless, suffer from the general limitation of the data being perceptual in nature. It would be desirable to access actual personnel les to assess the importance of the attributes on actual performance evaluations of internal auditors by their organizations. While privacy laws may make such a study difcult to conduct, condential access to a limited number of cases can provide insight about actual internal audit performance attributes in specic industries. Another limitation of the study is related to the size of the internal audit function and the size of the organization as a whole. The data in the bottom of Table 2 indicate that 79.5 percent of the organizations represented in the current study had 12 or less professionals in their internal audit functions. These data raise a question as to whether the results of the current study generalize to larger organizations. Future research using large organizations is needed to further investigate this potential difference. Two theoretically appealing attributes, nancial analysis and understanding complex information systems, did not receive support from CAEs as most important performance attributes of internal auditing. This nding is surprising in the sense that nancial analysis is regularly performed by internal auditors. Also, since information systems are at the core of the contemporary enterprise, internal auditors need to understand this technology well. A recent survey by Ernst and Young (cf., Update 2009) nds that technology plays a growing role in internal auditing. However, Update (2009) also nds that most organizations do not develop these competencies; instead, they outsource them. Future research may be needed to investigate the exact level of competency in information technology (and nancial analysis) that is needed for the practice of internal auditing by internal auditors of varying professional rank, and how to acquire this competency.
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Finally, the results of this study have implications for behavioral research. Specically, the results provide detailed performance attributes that can assist behavioral researchers in the development and measurement of performance attributes. By knowing the performance attributes that are important to internal auditors, behavioral researchers can engage in research on development of training programs and decision aids that can improve, assist, or reinforce performance attributes. Likewise, detailed performance attributes could be subjected to behavioral research aimed at improving training programs to assist professionals become more effective in their performance.

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