Internal Audit Effectiveness in Supporting Corporate Governance Objectives

Abstract

This research investigates the multifaceted role of internal audit functions in advancing corporate governance objectives, with a particular focus on the integration of behavioral and technological
dimensions often overlooked in traditional frameworks. While existing literature predominantly examines internal audit through compliance and risk management lenses, this study introduces a novel
conceptual model that positions internal audit as a dynamic, interactive agent within the governance
ecosystem. We propose that effectiveness is not merely a function of structural independence or procedural rigor, but is critically mediated by the audit function’s capacity for cognitive alignment with
the board and senior management, its strategic influence on organizational culture, and its adaptive
use of technology for governance intelligence. Through a qualitative multi-case study methodology
involving in-depth interviews and documentary analysis across twelve diverse organizations, we
uncover that the most effective internal audit functions employ a repertoire of ’soft’ influencing tactics, foster a culture of transparent dialogue beyond formal reporting lines, and act as early sensors
for emerging governance risks. Our findings challenge the prevailing ’assurance-centric’ paradigm
by demonstrating that internal audit’s greatest contribution to governance may lie in its ability to
facilitate learning, shape ethical decision-making norms, and bridge cognitive gaps between oversight bodies and operational management. The study concludes by offering a revised framework for
assessing internal audit effectiveness, one that balances traditional metrics with behavioral and relational indicators, thereby providing a more holistic tool for boards and regulators seeking to optimize
this critical governance mechanism