What are the determinants of internal auditing (IA) introduction and development? Evidence from the Italian public healthcare sector

IMPACT

This article sheds light on the reasons for practice variation in internal auditing (IA) introduction and development. From a policy perspective, the article’s findings highlight the relevance of accounting and accountability reforms as a crucial step for developing a new ‘awareness’ of the importance of internal controls and illustrate how IA can provide assurance on the internal control system. A further implication is that there is no ‘one-size-fits-all’ solution because different contexts need different IA models to mitigate the power and interests of the actors involved to ensure that IA is effective in terms of day-to-day activities.

ABSTRACT

This article responds to the need for greater theorization in public auditing research. The authors report on a study that investigated the introduction and development of internal auditing (IA) in public sector organizations by combining new institutional sociology and old institutional economics. The study compared three cases in the Italian National Health Service (INHS). Results demonstrate that institutional pressures do not generate the same responses across the cases. The power and interests of different actors (and their interactions) are crucial for IA legitimation and sense-making.

KEYWORDS:

• Accounting and accountability reforms
• case studies
• internal auditing (IA)
• new institutional sociology
• old institutional economics
• public healthcare

Acknowledgements

The authors thank the anonymous reviewer for the insightful comments. The authors are also grateful to the key informants from Veneto RHS, Emilia-Romagna RHS, and Sardinia RHS.

No conflicts of interest to be declared.