Electronic Theses and Dissertations





Date of Award


Document Type


Degree Name

Doctor of Philosophy


Business Administration



Committee Chair

Charles D Bailey

Committee Member

Frances Fabian

Committee Member

James Lukawitz

Committee Member

Kelly Richmond Pope


My dissertation focuses on examining the professional skepticism of internal auditors related to fraud risk assessment and environmental characteristics. The dissertation is comprised of three separate studies but the overall research question that is addressed is: How do certain environmental pressures affect the professional judgment (in this case, fraud risk assessment) and skeptical actions of internal auditors? The specific environmental factors examined in this dissertation are: (1) the level of coordination with external auditors, (2) a perceived conflict with legal counsel, and (3) the Chief Audit Executive's emphasis on professional skepticism. Each study consists of case materials (adapted from previous studies) with three parts: a fraud risk assessment, an indication of skeptical action, and personality trait questionnaires (including a professional skepticism scale). The results of this dissertation will be useful to audit committees, boards of directors, chief audit executives, corporate managers, external auditors, and regulators. The purpose of the first study is to investigate how the level of coordination with the external auditor affects internal auditors' fraud-related actions. Planned audit hours are the measure of skeptical action in this study. Prior research suggests that accountability strength influences auditor effort. The effect of external auditor coordination on internal auditors' planned audit hours has important implications for efficiency and perceived accountability to external stakeholders. Regulators and stakeholder organizations have encouraged more collaboration between external and internal auditors to improve efficiency and fraud detection. An experiment is conducted with 112 internal auditors to examine the theorized effects. The study uses a 2 x 2 between-subjects design and manipulates fraud risk (low or high) and external auditor coordination (low or high). Consistent with predictions, I find that internal auditors increase planned audit hours when fraud risk is high and that coordination moderates the relationship between fraud risk and hours. The results illustrate that although high external auditor coordination decreases internal auditors' hours (reflecting efficiency), internal auditors are more sensitive to responding to fraud risk when coordination is high (reflecting accountability).


Data is provided by the student.

Library Comment

dissertation or thesis originally submitted to the local University of Memphis Electronic Theses & dissertation (ETD) Repository.