Identifying the Components of Internal Audit Independence

Mehrani, Kaveh; Mohammadi, Ali

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year 17, Issue 66 (2025)

fa 2025, 17(66): 71-93

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Identifying the Components of Internal Audit Independence

Kaveh Mehrani ^*¹

, Ali Mohammadi¹

1- Department of Accounting & auditing, Faculty of Accounting and Financial Sciences, College of Management, University of Tehran, Tehran, Iran.

Abstract: (62 Views)

Internal audit independence is widely recognized as a critical prerequisite for the effective functioning of corporate governance systems, ensuring the reliability and impact of internal audit activities. The dual nature of internal auditors—who are simultaneously employees of the organization and providers of assurance and advisory services—creates inherent tensions that may compromise their autonomy. Motivated by these concerns, this study explores how internal audit independence is shaped and seeks to identify the core components that sustain or undermine it. The study was conducted in two major stages: an extensive review of theoretical foundations and prior research, followed by semi-structured interviews with key organizational actors. Data were collected through 16 interviews with internal audit managers and audit committee members using a snowball sampling approach. The data were analyzed through thematic analysis with the assistance of MAXQDA software, and key components were extracted. Triangulation and theoretical saturation were employed to ensure the validity of the findings. Findings indicate that independence is not merely a formal organizational arrangement, but a multidimensional construct combining structural positioning, operational freedom, and the capacity to report findings without fear of retaliation. Participants identified senior management as the primary source of threats to independence, while audit committees and boards of directors were viewed as the most influential supporters. Although professional standards and legal requirements were acknowledged as important safeguards, they were considered insufficient unless accompanied by appropriate reporting structures and active support from top leadership. Seven overarching components were ultimately identified: organizational structure and reporting lines; the role and support of the board of directors; the role of the audit committee; executive management’s interventions and attitudes; internal audit functions and responsibilities; auditors’ competencies and personal attributes; and legal and professional requirements. By proposing a context-specific framework of internal audit independence, this study addresses a significant gap in the Iranian internal auditing literature. The results offer practical insights for improving internal audit practices, strengthening training and professional guidance, and contributing to enhanced corporate governance.

Article number: 5

Keywords: Components of Independence, Internal Audit, Thematic Analysis.

Full-Text [PDF 789 kb] (40 Downloads)

Type of Study: Research | Subject: Special

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Mehrani K, Mohammadi A. Identifying the Components of Internal Audit Independence. fa 2025; 17 (66) : 5
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