Quality of Internal Audit Functions: The Development of Quantitative Measurement Scales

Abstract

The primary objective of this study is to construct a valid and reliable instrument to quantitatively measure the quality of internal audit function via level of conformance by internal auditors towards the International Professional Practice Framework (IPPF). Two separate pilot tests were performed. The instrument was also reviewed by two experts in internal auditing from the USA and Malaysia. The data were collected from 400 internal auditors, auditors, accountants and account executives in Malaysia. The present study concludes that most of the existing instruments suffer major weaknesses that limit its value and usability for empirical studies. The results indicated that the new instrument satisfies the criteria for a valid and reliable research instrument and conform to the existing framework suggested by the Institute of Internal Auditors (IIA). A new approach of measurement was used as a solution to existing instruments that were limited to the use of categorical, Likert-based measurement scales. This present study suggests a modified measurement scales that allow collection or ratio data. Moreover, this instrument also enables more advance statistical analysis to be conducted.