BEHAVIORAL RESEARCH IN ACCOUNTING American Accounting Association

Vol. 24, No. 1 DOI: 10.2308/bria-50023

2012
pp. 1–23

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

T
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 benefited 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 2006–2007, 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

1
2 Abdolmohammadi

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 first 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 benefit 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 efficient 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.
Specifically, 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 3

assessment versus opinion on management’s assessment of internal controls), fraud risk assessment
(investigation of all kinds of fraud versus financial 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
financial 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 final 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.
Hofstede’s (1980; 2001) cultural relativism theory suggests that professional judgment is
influenced by one’s cultural background. Since the practice of internal auditing requires various
professional judgments, the importance of performance attributes is expected to be influenced 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 five distinct cultural clusters of
Anglo-Saxon, East-European, Germanic-Europe, Latin-American, and Latin-European. The effects
of this classification 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 classified 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 significant 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 study’s 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 final 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 efficiently. 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 efficiency 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) identified a detailed list of performance attributes for external
auditors. Their finding 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, conflict 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 framework’s 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 5

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 refined by Hofstede (2001)
and House et al. (2004) posits that cultural differences have significant 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 Hofstede’s 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 five distinct cultural clusters.
Based on Hofstede’s (1980) work, Gray (1988) argued for the relevance of cultural relativism
to the development of the accounting profession in various countries. Gray’s 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 financial 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 significant 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
affiliates (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 specific 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 IIA’s 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) finds 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 classification, House et al. (2004) identify
various cultural clusters for 62 societies. Matching data from CBOK (2006) and House et al.
(2004), the current study identified 19 countries that could be classified into five distinct cultural
clusters for investigation. Specifically, two criteria were used to select countries from CBOK (2006)
for the current study. First, the country to be selected had to be clearly identified with a specific
cultural cluster by House et al. (2004). House et al. (2004) have cultural classifications 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 sufficient data for statistical analysis. The resulting sample
used in this study consists of 1,497 responses from CAEs in 19 countries classified into five 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 significant,
with F ¼ 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 significant differences (F ¼ 10.27, p , 0.001). As shown in the last
column of Table 2, other demographic variables also indicate significant 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
(five 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 significant (v2 ¼
119.27, p , 0.001).
Table 2 also presents the size of the internal audit function of the participating CAEs. A size of
0–3 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 4–12 professionals, 9.5 percent were from functions with 13–24
professionals, leaving 11.0 percent of participants from large audit function of 25 or more
professionals. The differences by cultural cluster are highly significant (v2 ¼ 35.78, p , 0.001). The
final 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 7

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

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 five
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 identifies eight
attributes (confidentiality, 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
Anglo- East Germanic Latin Latin Statistic
Demographic Variable Saxon European Europe American European Total (Sig.)
CAE Age (years) 46.21 37.37 46.95 43.21 44.49 45.37 F ¼ 17.21
(8.44) (6.74) (8.14) (7.56) (8.08) (8.45) (, 0.001)
Years as CAE 6.94 4.36 8.73 7.50 5.28 6.69 F ¼ 10.27
(6.46) (2.69) (7.07) (5.98) (4.87) (6.16) (, 0.001)
Years of Internal Audit 14.04 5.60 11.94 13.51 7.95 12.26 F ¼ 33.97
Experience (9.80) (3.52) (7.90) (10.63) (5.70) (9.26) (, 0.001)
Years of IIA Membership:
5 or less 36.6% 79.3% 38.5% 69.1% 63.5% 46.0% v2 ¼ 119.27
6 or more 63.4% 20.7% 61.5% 30.9% 36.5% 54.0% (, 0.001)
% Having Graduate Ed. 38.6% 27.6% 70.7% 42.7% 39.1% 41.2% v2 ¼51.99
(, 0.001)
% Having AC/AU/IA 74.4% 43.1% 55.3% 88.5% 38.8% 65.2% v2 ¼ 169.27
major (, 0.001)
% Having CIA Cert. or 48.0% 13.8% 39.0% 30.2% 24.4% 39.9% v2 ¼ 75.71
Equivalent (, 0.001)
Size (fulltime IA professionals):
00–03 43.0% 35.7% 47.0% 22.3% 33.3% 39.7%
04–12 38.9% 42.9% 35.7% 46.8% 41.2% 39.8%
13–24 8.9% 16.1% 6.1% 14.9% 9.9% 9.5% v2 ¼ 35.78
25 or more 9.2% 5.4% 11.3% 16.0% 15.6% 11.0% (, 0.001)
Size (full-time employees):
500 or less 27.7% 41.1% 30.8% 48.4% 22.1% 28.6%
501–5000 44.9% 35.7% 42.5% 37.9% 44.1% 43.7% v2 ¼ 34.13
5001 or above 27.4% 23.2% 26.7% 13.7% 33.8% 27.6% (, 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 significance.2 For example, leadership was identified 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 significant
(Cochran’s Q ¼ 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 significant differences by professional
rank for all but one attribute, financial analysis, where the Cochran Q is only 2.52 and not
statistically significant 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 identified the 5 as the most important for each
professional rank. As bolded in Table 3, Panel C, five competencies—ability to promote the internal
audit in organization, analytical ability to work through an issue, communication, and writing
skills—were identified (bolded in the table) by at least 50 percent of CAEs as important for at least
one of the professional ranks. The Cochran’s Q statistic shows highly significant 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 significantly
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. Specifically,
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 identification of 13 attributes
in Factor 1 and 5 attributes in Factor 2.
The 13 attributes in Factor 1 (confidentiality, 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 Staff Sr/Supr IAM CAE Cochran Qa
a. Confidentiality 73 56 52 69 316.73
b. Facilitating 11 26 32 35 270.39
c. Governance and ethics sensitivity 22 20 28 52 627.04
d. Interpersonal skills 69 50 45 50 269.25
e. Leadership 3 20 47 78 1,872.34
f. Objectivity 75 54 43 56 379.35
g. Relationship building 28 24 32 47 259.73
h. Staff management 2 30 44 36 690.83
i. Team building 6 30 39 33 477.26
j. Team player 67 35 17 13 1,302.40
k. Working independently 57 26 15 16 852.86
l. Work well with all levels 42 35 43 59 208.40
of management

Panel B: Technical Skills

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

(continued on next page)

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Chief Audit Executives’ Assessment of Internal Auditors’ Performance Attributes 11

TABLE 3 (continued)

Panel C: Competencies
% of CAEs Selecting the Attribute
as the Most Important
Staff Sr/Supr IAM CAE Cochran Qb
a. Ability to promote IA in organization 8 9 27 79 2,140.61
b. Analytical (ability to work through an issue) 66 47 29 24 660.23
c. Change management 4 6 17 34 670.31
d. Communication 50 42 46 62 181.60
e. Conflict resolution 6 19 33 41 573.30
f. Critical thinking 47 32 25 31 202.28
g. Conceptual thinking 18 16 20 38 282.85
h. Foreign language skills 11 7 9 11 30.84
i. Keeping up with standards and regulations 19 21 30 41 255.59
j. Organization skills 25 22 26 29 17.17
k. Presentation skills 10 14 23 37 414.86
l. Problem identification and solution 46 33 22 21 310.82
m. Project planning and management 7 24 36 25 349.07
n. Report development 20 28 24 12 125.40
o. Time management 42 27 17 14 438.73
p. Training and developing staff 2 19 39 30 611.68
q. Understanding complex information systems 14 14 14 11 13.23
r. Writing skills 52 34 25 24 397.83
a
Bold Cochran Qs are significant at the 0.001 level.
b
Bold Cochran Qs are significant at the 0.004 level or lower.

encompass various skills for internal auditors, and thus can broadly be defined as technical skills. On
the other hand, the five 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 defined as leadership attributes. These factor classification 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 identified, 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 ¼ 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 significant results suggest that technical skills are more important for the
lower professional ranks than for upper ranks (Kendall-W ¼ 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
Identified by CAEs for Staff
Factor
1 2
Attribute Technical Skills Leadership Attributes
Confidentiality 0.579 0.005
Governance and ethics sensitivity 0.128 0.362
Interpersonal skills 0.541 0.211
Leadership 0.081 0.574
Objectivity 0.643 0.007
Team player 0.465 0.178
Working independently 0.407 0.244
Work well with all levels of management 0.286 0.237
Data collection and analysis 0.701 0.136
Identifying types of controls (e.g., preventative, detective) 0.478 0.001
Interviewing 0.534 0.106
Negotiating 0.153 0.498
Risk analysis 0.251 0.536
Understanding business 0.400 0.211
Ability to promote the internal audit function 0.121 0.539
Analytical (ability to work through an issue) 0.609 0.067
Communication 0.497 0.028
Writing skills 0.476 0.094
Variance Explained 20.21% 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 identified 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 significantly 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 finding is consistent with the analysis
reported earlier in Table 5 and Figure 1.
Viewed horizontally, the data in Table 6 show highly significant differences between cultural
clusters for both leadership attributes and technical skills. Specifically, the ANOVA analysis of
leadership attributes for staff has an F-statistic of 25.20, which is highly significant at the 0.001
level. In comparison to the overall aggregate importance rating of 13.12, the rating for the Latin-
American 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 ¼ 12.61, p , 0.001), for whom 36.94
percent of Latin-American CAEs selected leadership attributes as most important, which is
significantly 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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Chief Audit Executives’ Assessment of Internal Auditors’ Performance Attributes 13

TABLE 5
Leadership Attributes versus Technical Skills
(Mean Proportions of CAEs Selecting Attributes with Their Standard Deviations
and Rank Orders)
Staff Sr/Supr IAM CAE Kendall W-Statistic
a. Leadership Attributes 13.12 22.56 42.18 71.89
(Standard Deviation) (17.49) (23.17) (30.87) (25.64)
Mean Rank 1.58 1.95 2.74 3.73 0.659a
b. Technical Skills 60.63 41.91 35.37 46.21
(Standard Deviation) (24.29) (27.18) (24.17) (18.54)
Mean Rank 3.43 2.44 1.80 2.32 0.333a

a
Significant at the 0.001 level.

assigned the lowest ratings. Overall, these differences were highly significant (F ¼ 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 ¼ 3.25, p ¼ 0.012).
For technical skills, no significant difference between cultural clusters was indicated for Senior/
Supervisors (F ¼ 1.49, p ¼ 0.202), and the difference for managers was significant at the marginal
level of 0.064 (F ¼ 2.22). However, the differences in importance ratings by cultural cluster were
significant for staff (F ¼ 9.26, p , 0.001) and CAEs (F ¼ 2.86, p ¼ 0.023). The result for staff
indicates that the East-European rating (51.42) is significantly below the overall mean of 60.63.
Finally, the importance ratings of technical skills for CAEs in the East-European cluster (50.85) are
significantly 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 significantly 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)
East- Germanic Latin- Latin-
Anglo-Saxon European Europe American European Overall F-Statistic
Factor n ¼ 824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a (Significance)
Leadership Attributes of:
Staff 10.17 19.26 12.82 26.82 16.81 13.12 25.20
(, 0.001)
Sr./Supr. 20.15 18.52 23.88 36.94 25.78 22.56 12.61
(, 0.001)
Manager 40.85 37.41 33.98 56.24 46.01 42.18 8.11
(, 0.001)
CAE 71.09 68.52 67.18 75.06 75.89 71.89 3.25
(0.012)
Technical Skills of:
Staff 63.55 51.42 59.60 56.74 55.02 60.63 9.26
(, 0.001)
Sr./Supr. 42.63 34.19 41.82 43.89 40.63 41.91 1.49
(0.202)
Manager 35.88 34.05 28.83 37.47 35.92 35.37 2.22
(0.064)
CAE 45.75 50.85 42.20 48.42 47.53 46.21 2.86
(0.023)

Bold numbers are significant 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 five attributes in the
leadership attributes factor for each of the professional ranks. The results are reported in Table 7,
where significant differences are bolded. In the discussion that follows, two points about the
findings in Table 7 are summarized. The first is the degree of cultural cluster effect on the results,
where the v2 test and its significance 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 five leadership attributes for staff are significantly
different by cultural clusters (i.e., all v2 tests are highly significant). 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 Latin-
American (46 percent) and Latin-European (30 percent) clusters. Differences were also observed
for seniors/supervisors, IAMs, and CAEs. However, the number of significant v2s decreases for
higher ranks (i.e., more consensus is observed for higher ranks than for lower ranks). For example,
of the five attribute ratings for CAEs, four v2s were not significant. Overall, 15 of the 20
comparisons (five attributes times four professional ranks) were significant. This result provides
general support for H1 at the individual attribute level.

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Chief Audit Executives’ Assessment of Internal Auditors’ Performance Attributes 15

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., five 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 significantly
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 five differences. The East-European cluster has 19
significant 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
findings reported earlier because the Logits typically returned statistically significant models with
pseudo R2s of less than 10 percent, where at least one of the dummy variables for cultural cluster
was statistically significant. Also, while there were isolated significant 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 significant 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
(1–4 for staff, senior/supervisor, manager, and CAE), and their interactions. The results (not
tabulated) indicate that all logistic regressions produce highly significant 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 significant.4 The ‘‘confidentiality’’ regression model was the exception in which the
overall model was statistically significant, but none of the interactions between cultural cluster and
professional rank was significant. The significant interaction effects in 17 of the 18 models add
further support to the conclusion that cultural cluster is associated with significant 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 specification.

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TABLE 7
Leadership Attributes by Cultural Cluster
(Proportions of CAEs Selecting Each Attribute in Each Cultural Cluster)

Panel A: Staff
Anglo- East- Germanic Latin- Latin-
Saxon European Europe American European Overall
n ¼ 824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a v2 (Sig.)
Governance and 15 57 18 46 30 22 103.81
Ethics Sensitivity (0.000)
Leadership 2 0 1 14 2 3 46.15
(0.000)
Negotiating 6 9 13 7 9 7 9.74
(0.045)
Risk Analysis 22 30 23 49 34 26 42.64
(0.000)
Ability to promote IA 7 0 10 18 9 8 17.23
(0.002)

Panel B: Senior/Supervisor
Anglo- East- Germanic Latin- Latin-
Saxon European Europe American European Overall
n ¼ 824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a v2 (Sig.)
Governance and 15 28 24 38 28 20 42.62
Ethics Sensitivity (0.000)
Leadership 19 13 18 39 20 20 21.22
(0.000)
Negotiating 22 17 39 27 24 24 15.77
(0.003)
Risk Analysis 37 33 33 59 48 40 27.33
(0.000)
Ability to promote IA 8 2 6 22 9 9 25.07
(0.000)

Panel C: Manager
Anglo- East- Germanic Latin- Latin-
Saxon European Europe American European Overall
n ¼ 824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a v2 (Sig.)
Governance and 21 24 27 48 43 28 70.40
Ethics Sensitivity (0.000)
Leadership 49 44 31 61 45 47 19.07
(0.001)
Negotiating 50 43 40 55 50 50 6.34
(0.175)
Risk Analysis 60 52 47 68 61 59 11.34
(0.023)
Ability to promote IA 25 24 25 48 31 27 24.43
(0.000)

(continued on next page)

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TABLE 7 (continued)

Panel D: CAE
Anglo- East- Germanic Latin- Latin-
Saxon European Europe American European Overall
n ¼ 824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a v2 (Sig.)
Governance and 48 37 50 71 63 52 35.67
Ethics Sensitivity (0.000)
Leadership 80 78 70 80 75 78 7.16
(0.128)
Negotiating 73 69 68 67 77 73 5.66
(0.226)
Risk Analysis 78 74 70 75 82 78 6.96
(0.138)
Ability to promote IA 77 85 79 82 82 79 5.41
(0.248)
a
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 significance.

also had the lowest percentage of graduate studies and professional certification than other clusters.
Given these differences, I repeated the cultural difference analysis in Table 6 without the East-
European 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.
Specifically, all ‘‘Leadership Attributes’’ were highly significant by cultural cluster. The same was
true for technical skills, where the intercultural difference was not significant for seniors/
supervisors, but the remaining three ANOVAs were statistically significant.
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 significant
at the 0.023 for CAE technical skills in Table 6, it was not significant in the analysis of the 17
countries that excluded Poland and Venezuela (p ¼ 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, sufficient
sample sizes were available for only 10 industries (banks, education, finance, 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 first, and then by more-regulated (e.g., banks, utilities)
versus less-regulated (e.g., manufacturing, retail) industry classification. The results (not tabulated)
do not present a clear pattern of industry effects. For example, the more-regulated/less-regulated
industry analysis indicated significance 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
Anglo- Eastern- Germanic- Latin- Latin-
Saxon Europe Europe American European Overall
n ¼824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a v2 (Sig.)
Confidentiality 70 67 76 84 81 73 18.87
(0.001)
Interpersonal skills 76 56 58 54 61 69 46.06
(0.000)
Objectivity 74 63 73 84 75 75 7.69
(0.104)
Team player 66 69 84 72 68 67 1.84
(0.765)
Work independently 62 57 70 34 43 57 54.26
(0.000)
Work well with management 46 15 38 33 39 42 25.30
(0.000)
Data collection and analysis 78 78 77 79 77 78 0.14
(0.989)
Identify types of controls 60 24 35 64 48 55 53.25
(0.000)
Understanding business 48 35 59 39 33 45 30.05
(0.000)
Interviewing 63 57 60 44 57 60 14.31
(0.006)
Analytical 70 50 68 59 57 66 22.36
(0.000)
Communication 58 43 52 41 30 50 70.60
(0.000)
Writing skills 55 56 45 53 46 52 9.06
(0.060)

Panel B: Senior/Supervisor
Anglo- Eastern- Germanic- Latin- Latin-
Saxon Europe Europe American European Overall
n ¼ 824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a v2 (Sig.)
Confidentiality 52 52 64 69 62 56 18.95
(0.001)
Interpersonal skills 54 44 39 40 43 50 21.15
(0.000)
Objectivity 52 44 62 58 59 54 9.32
(0.054)
Team player 31 37 36 55 42 35 28.38
(0.000)
Work independently 25 33 39 17 27 26 15.09
(0.005)
(continued on next page)

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TABLE 8 (continued)
Anglo- Eastern- Germanic- Latin- Latin-
Saxon Europe Europe American European Overall
n ¼ 824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a v2 (Sig.)
Work well with management 40 15 26 33 29 35 25.53
(0.000)
Data collection and analysis 36 30 28 33 30 34 5.63
(0.23)
Identify types of controls 44 32 37 59 45 44 13.25
(0.010)
Understanding business 47 26 41 41 39 44 13.15
(0.011)
Interviewing 45 32 52 38 49 45 9.95
(0.041)
Analytical 47 37 52 55 45 47 6.44
(0.169)
Communication 46 32 40 38 32 42 18.82
(0.001)
Writing skills 39 32 27 35 27 34 10.93
(0.027)

Panel C: Manager
Anglo- Eastern- Germanic- Latin- Latin-
Saxon Europe Europe American European Overall
n ¼ 824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a v2 (Sig.)
Confidentiality 49 46 56 64 57 52 10.96
(0.027)
Interpersonal skills 51 44 33 35 34 45 34.82
(0.000)
Objectivity 41 44 44 55 47 43 8.53
(0.074)
Team player 12 26 11 39 27 17 6.34
(0.175)
Work independently 13 22 16 18 19 15 7.71
(0.103)
Work well with management 49 28 29 38 33 43 36.99
(0.000)
Data collection and analysis 14 26 13 12 14 14 6.91
(0.141)
Identify types of controls 32 41 29 38 38 33 6.63
(0.157)
Understanding business 63 52 45 55 60 60 16.23
(0.003)
Interviewing 37 33 31 25 42 36 10.35
(0.035)
Analytical 28 43 21 39 31 29 12.83
(0.012)
Communication 50 19 37 44 44 46 25.13
(0.000)
Writing skills 28 19 11 27 21 25 20.55
(0.000)
(continued on next page)

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TABLE 8 (continued)

Panel D: CAE
Anglo- Eastern- Germanic- Latin- Latin-
Saxon Europe Europe American European Overall
n ¼ 824 n ¼ 54 n ¼ 103 n ¼ 85 n ¼ 263 n ¼ 1,329a v2 (Sig.)
Confidentiality 64 67 75 79 76 69 19.69
(0.001)
Interpersonal skills 54 54 40 47 40 50 20.78
(0.000)
Objectivity 51 69 63 64 64 56 22.84
(0.000)
Team player 9 24 7 35 22 14 5.66
(0.226)
Work independently 11 28 18 25 26 16 48.29
(0.000)
Work well with management 65 87 54 47 41 59 71.52
(0.000)
Data collection and analysis 11 33 12 20 14 13 25.38
(0.000)
Identify types of controls 27 32 34 29 39 30 14.78
(0.005)
Understanding business 86 78 70 78 84 83 20.59
(0.000)
Interviewing 39 33 34 26 40 36 6.32
(0.176)
Analytical 21 39 21 37 27 24 19.34
(0.001)
Communication 67 35 44 59 62 62 38.66
(0.000)
Writing skills 26 37 13 26 19 24 17.11
(0.002)
a
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 significant at the 0.05 level or lower.

SUMMARY AND CONCLUSIONS

A large sample of chief audit executives (CAEs) from 19 countries located in five different
cultural clusters identified 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 confirmed through various multivariate analyses, where significant interaction
effects between cultural cluster and professional rank were found. However, industry-specific
analysis indicated no pattern of industry differences for the vast majority of performance attributes.
These results suggest that a generic profile 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-specific guidance may be appropriate. This conclusion suggests future studies of
industry-specific effects for the purpose of developing industry-specific guidance. The IIA’s (2009)

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Chief Audit Executives’ Assessment of Internal Auditors’ Performance Attributes 21

Framework has no industry-specific guidance, and it has indicated that such information will be
added when available.
An interesting finding in the study is that attributes such as financial 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 five 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 five 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 find more specific reasons for the differences by cultural cluster. For example,
future research may benefit from investigating the association of specific cultural dimensions, such
as uncertainty avoidance and power distance, with importance ratings of various performance
attributes.
The IIA’s (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 refine the Framework further.
A limitation in the current study is CBOK’s (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 files 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 difficult to conduct, confidential access to a limited number of cases can provide
insight about actual internal audit performance attributes in specific 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, ‘‘financial analysis’’ and ‘‘understanding complex
information systems,’’ did not receive support from CAEs as most important performance attributes
of internal auditing. This finding is surprising in the sense that financial 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) finds that technology plays a growing role in internal auditing. However,
Update (2009) also finds 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 financial 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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22 Abdolmohammadi

Finally, the results of this study have implications for behavioral research. Specifically, 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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