Ph.D., MBA, CPA, CTP, Grand Canyon University, Phoenix, Arizona, USA
DBA, MBA, CIA CGAP, CFE, Pacific Union College, Angwin, USA
This article is about exploring the relationship between internal human resources auditing and environmental control in the US public sector. The main purpose of this study was to examine the extent to which the determinants of internal audit staff have the potential to influence the predictive value of the public sector control environment. The tools of the work are presented by a quantitative correlation analysis to determine the interdependence of variables (aspects of recruitment, accountability) and resultant indicator (public sector environment). By systematizing literary sources and approaches to solving the problem, as well as using the COSO 2013 Internal Control Framework as a theoretical framework, the authors focus on the question of how much internal audit recruitment, and accountability experience can influence in the foreseeable future and each of the two major COSO components. The empirical analysis was presented in the research, which made it possible to substantiate the following conclusions: the results of two multiple linear regression models did not show statistically significant except for recruitment, nonparametric correlation of Kendall’s Tau-b correlation is allowed to identify significant interrelationships development. The findings of the study may be useful for implementing further transformational changes in the functioning of the global economy in the context of the growing role and importance of international audit and its positive impact on the public sector in the United States.
Keywords: Internal Auditing, Personnel Factors, Control Environment, Management, Innovation.
JEL Classification: H83, M42, M48.
Cite as:Kasztelnik, K. Gaines, V. W. (2019). Correlational Study: Internal Auditing and Management Control Environment Innovation within Public Sector in the United States. Financial Markets, Institutions and Risks, 3(4), 5-15. http://doi.org/10.21272/fmir.3(4).5-15.2019.
- Badara, & Saidin. (2013). Impact of the effective internal control system on the internal audit effectiveness at local government level. Journal of Social and Development Sciences, 4(1), 16-23.
- Balc, L. B., Ilies, R., Cioban, B., & Cuza, B. (2013). Corporate governance: Conceptual approaches. Managerial Challenges of the Contemporary Society, 5, 14-17.
- Birkett, B. S. (2014). The recent history of corporate audit committees. Accounting Historians Journal, 13(2), 109-124.
- Burns, J., & Simer, B. (2013). COSO Enhances its Internal Control: Integrated framework. Deloitte–HeADS Up, 20(17), 1-16.
- Cohen, J. (1992). A Power Primer. Psychological Bulletin, 112(1), 155-159.
- Committee of Sponsoring Organizations of the Treadway Commission. (2013). Internal Control –Integrated Framework. Internal Control over external financial overreporting: A compendium of approaches in examples: New York, NY.
- D’Aquila, J. (2013). COSO’s Internal Control: Integrated Framework. CPA Journal, 83(10), 22-29.
- D’Aquila, J., & Houmes, R. (2014). COSO‘s Updated Internal Control and Risk Management Frameworks. CPA Journal, 84(5), 54-59.
- Dominic, S. B. S., & Martinov-Bennie, N. (2011). The internal audit function. Managerial Auditing Journal, 26(7), 605-622. doi:10.1108/02686901111151332.
- Guxholli, S., Karapici, V., & Gjinopulli, A. (2012). Corporate governance and audit. China–USA Business Review, 11(2) 253-267.
- Janvrin, D. J., Payne, E. A., Byrnes, P., Schneider, G. P., & Curtis, M. B. (2012). The updated COSO Internal Control –Integrated Framework: Recommendations and opportunities for further research. Journal of Information Systems, 26(2), 189-213. doi:10.2308/isys-50255
- Kapić, J. (2013). Internal supervision, internal control and internal audit. Business Consultant/Poslovni Konsultant, 5(31), 62-73.
- Laerd Statistics. (2013). Multiple Regression Analysis using SPSS Statistics: Retrieved from https://statistics.laerd.com/spss-tutorials/multiple-regression-using-spss-statistics.php.
- Noland, T. G., & Metrejean, E. (2013). The importance of the control environment: Expense account fraud at blue grass airport. Journal of Business & Economics Research (Online), 11(2), 97.
- Sarens, G., & Abdolmohammadi, M. J. (2011). Monitoring effects of the internal audit function: Agency theory versus other explanatory variables. International Journal of Auditing, 15(1), 1-20. doi:10.1111/j.1099-1123.2010.00419.x
- Schelker, M. (2013). Auditors and corporate governance: Evidence from the public sector. Kyklos, 66(2), 275-300. doi:10.1111/kykl.12021
- Spoehr, W. D. (2012). Consequences of this connects of “tone at the top” at the institutional and operational level. Financial Executive, 28(10), 68-69.
- Suyono, E., & Hariyanto, E. (2012). Relationship between internal control, internal audit, and organization commitment with good governance: Indonesian case. China – USA Business Review, 11(9).
- The Institute of Internal Auditors. (2013). International Professional Practices Framework (IPPF). Retrieved from www.theiia.org.
- The IIA Research Foundation. (2015). 2015 Global internal audit common body of knowledge (CBOK) practitioner study. Retrieved from https://na.theiia.org/iiarf/Pages/Common-Body-of-Knowledge-CBOK.aspx:
- Tidrick, D. E. (2012). Improving governance and internal control. The CPA Journal, 82(10), 6-11.
- Timea, F. M. (2011). Corporate governance: The rolling application of the principle of transparency. Annals of the University of Oradea, Economic Science Series, 20(1), 616-621.
- Wilson, T., Wells, S., Little, H., & Ross, M. (2014). A history of internal control: From then to now. Academy of Business Journal, 1, 73-89.