The development of internal auditing in Ethiopia: the role of institutional norms

The development of internal auditing in Ethiopia: the role of institutional norms

Purpose – The purpose of this paper is to examine the extent to which institutional norms determine
attributes of internal audit practices and how institutional changes explain the development of these
practices.
Design/methodology/approach – The authors employed a qualitative research approach based on
archival analysis and interview evidence.
Findings – Findings indicate that regulation-based institutional norms explain the adoption of
internal audit and the function’s characteristics in Ethiopian organizations. Furthermore, innovative
introduction of internal audit practices originate within individual organizations and eventually
get institutionalized through diffusion. Such innovations are associated with organizational size, top
management characteristics, internal audit advancement in technology, and exogenous input from the
external environment. Widely accepted internal audit practices, as institutional norms, are not always
taken-for-granted at the level of individual organizations. The institutional change perspective enables
explaining how new internal audit approaches are introduced to supplant old ones.
Originality/value – This study theorizes the development of internal audit practices from an
institutional change perspective. Being the first study to do so, it contributes to the understanding of key
drivers of institutional change that initiate newinstitutional norms that foster the development of internal
audit through introduction and diffusion of new audit practices as old ones are deinstitutionalized.

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