| The purpose of this study is to provide empirical evidence relevant to perceptions of internal auditor independence. Specifically, this study investigates how the auditor practitioners (both internal and external auditors) perceive the importance of five selected factors that characterize the organizational settings of an internal audit department.; Role theory is used to develop the conceptual model for this study in which the judgment of internal auditor independence is viewed as the role perception of internal auditors. A modified version of the Brunswik's lens model was developed to provide "paramorphic" representation of judgment of independence.; The research methodology of this study is based upon a laboratory experiment in which a replicated factorial design was used to elicit the subjects' judgments of independence. The data collected from this experiment were analyzed by three statistical methods: conjoint measurement, multiple regression, and cluster analysis.; The major findings follow. First, the five selected factors were not perceived as equally important by the subjects. In general, internal auditor's scope of audit, scope of service, and reporting level were perceived as more important than adequacy of organizational support, and formalization of audit policies. Second, the two groups of auditors disagree, significantly, on the relative importance of scope of internal audit service. Third, while large individual differences existed on the relative importance of the five selected factors, the degree of judgment consensus, in general, is high within each auditor group. Fourth, the internal auditor's perceived role conflict and role ambiguity were inversely related to his perceived level of professional autonomy. Finally, the internal auditors' judgments were not notably affected by the perceptions of their own organizational environment.; Given the above findings, the following implications are suggested: First, the organizational settings are critical to internal auditor independence. Second, rule making bodies should provide more explicit guidelines concerning internal audit independence evaluation, particularly, in the area of scope of internal audit service. Third, while the auditor's reporting level is an important factor to independence, it should not be the only consideration. (Abstract shortened with permission of author.)... |
