Evolving Role of Internal Audit: Characteristics and Benefits of Trusted Advisor Adoption

In 1999, the internationally applicable role of the internal audit function was redefined to be a trusted advisor to the organization rather than a stereotypical “corporate watchdog.” However, even today there is no clear understanding of what characteristics are associated with an internal audit function’s adopting a trusted advisor role, nor of what benefits the trusted advisor role yields for the organization. Using survey data from 250 chief audit executives, we find that a mix of professional and interpersonal internal audit characteristics is associated with adopting a trusted advisor role. Additionally, we find associations between trusted advisor internal audit functions and perceived benefits to the organization such as audit effectiveness, efficiency, and usability of audit outputs. Our findings contribute to the academic knowledge on the evolution of internal audit functions and identify incentives for adopting trusted advisor roles. Data Availability: Raw data were generated at a national Institute of Internal Auditors chapter. Derived data supporting the findings of this study are available from the first author on request. JEL Classifications: M40; M42; G34; G32; M4; G3.