Fields of Research
- Corporate Governance: Die Corporate Governance-Forschung deckt das gesamte Gebiet der Unternehmensüberwachung und -kontrolle ab. Hierzu werden insbesondere Projekte zur Positionierung von Vorstand und Aufsichtsrat, deren Verbindung zu weiteren Governance-Organen sowie Themenstellungen mit Bezug zur Mitbestimmung und der Eigentümerstruktur untersucht.
- Interne Revision: Die Interne Revision als Anbieter von unabhängigen und objektiven Prüfungs- und Beratungsdienstleistungen ist ein fester Bestandteil der guten Unternehmensführung geworden. Neben branchenspezifischen Studien wird in diesem Forschungsgebiet das gesamte Themenspektrum der Revisionsarbeit abgedeckt.
- Künstliche Intelligenz: Künstliche Intelligenz ist eine transformative Technologie, die neue Möglichkeiten in der Internen Revision und weit darüber hinaus eröffnet. Hierzu decken die Forschungsvorhaben insbesondere KI-basierte Innovationen in der Datenanalyse, Anomalieerkennung, Risikobewertung und Entscheidungsunterstützung ab, die in verschiedenen institutionellen Kontexten angewendet werden.
Short and Synthetically Distort: Investor Reactions to Deepfake Financial News
Emett, S. / Eulerich, M. / Pickerd, S. / Wood, D.
Abstract
Recent advances in artificial intelligence have led to new forms of misinformation, including highly realistic "deepfake" synthetic media. We conduct three experiments to investigate how and why retail investors react to deepfake financial news. Results from the first two experiments provide evidence that investors use a "realism heuristic," responding more intensely to audio and video deepfakes as their perceptual realism increases. In the third experiment, we introduce an intervention to prompt analytical thinking, varying whether participants make analytical judgments about credibility or intuitive investment judgments. When making intuitive investment judgments, investors are strongly influenced by both more and less realistic deepfakes. When making analytical credibility judgments, investors are able to discern the noncredibility of less realistic deepfakes but struggle with more realistic deepfakes. Thus, while analytical thinking can reduce the impact of less realistic deepfakes, highly realistic deepfakes are able to overcome this analytical scrutiny. Our results suggest that deepfake financial news poses novel threats to investors.
A Study of Diversity and Performance in Internal Audit Teams: Insights from Chief Audit Executives
Bonrath, A. / Eulerich, M.
Abstract
Given heterogeneous findings on how diversity impacts performance, we investigate diversi-ty in internal audit teams. Using responses from 302 chief audit executives, we analyze demographic and cognitive diversity’s effects on perceived internal audit performance. Our metrics go beyond gender diversity to include nationality and education. National diversity gains importance with the increasing internationalization of companies and the global focus of internal auditing. Our findings highlight that gender diversity is conducive to team performance, whereas a skewed gender composition may impede it. We find evidence that na-tional and educational diversity can potentially enhance performance. However, our results indicate that in certain configurations, such as a uniform group, perceived performance may be higher, revealing a complex relationship between diversity and performance. Our results illustrate how diversity can also trigger biases to exclude minority groups, such that teams do not integrate additional perspectives to improve decision-making and offset the expected benefits of diversity.
Patience is Key: The Time It Takes to See Benefits from Continuous Auditing
Eulerich, M. / Fligge, B. / López Kasper, V. I. / Wood, D. A.
Abstract
Despite research showing numerous benefits of continuous auditing, uptake by internal audit functions has been quite slow. Using a case study approach and field data from a multinational company, we study two possible reasons for the slow uptake of continuous auditing: (1) the time it takes for continuous auditing to result in measurable reductions in audit risks and (2) that not every type of risk is equally likely to improve from continuous auditing. In our case company, it takes three years (on average) before observing significant risk reductions from implementing continuous auditing. We also find that the benefits of implementing continuous auditing vary by risk factor, ranging from no improvement to 51.6 percent for each additional year of continuous auditing use. These findings can provide internal auditors with a realistic expectation of the benefits and limitations, as well as the timetable for realizing benefits, when adopting continuous auditing.
A Demonstration of How ChatGPT Can be Used in the Internal Auditing Process
Eulerich, M./Wood, D.
Abstract
For the past several years, internal audit functions (IAFs) have been significantly increasing their digitization efforts to enhance the efficiency and effectiveness of the IAF. The introduction of ChatGPT has increased the potential for IAFs to have a more significant impact; however, there is little guidance on how ChatGPT can influence the day-to-day work of internal auditors. This paper demonstrates with specific examples how ChatGPT can be used to enhance all aspects of the audit process. While not comprehensive in nature, the detailed, illustrative examples should help internal auditors see actionable steps they can take to be more efficient and effective and thus add more value to their organizations. Finally, it helps researchers to identify potential avenues for future research.
Internal Audit Investment: Assurance Service Substitution and the Value in 'Value-Add'
Eulerich, M. / Calvin C. / Fligge, B.
Abstract
This study investigates organizational benefits obtained from investing in internal audit activities beyond benchmark expectations. Practitioners frequently rely on benchmarking studies to determine whether their internal audit resources are sufficient, but there is no prior evidence on how deviations from the benchmark (specifically, above-benchmark investment) affect organizational value. We utilize a unique survey dataset and develop a new measure of investment in internal audit to explore this issue. Our results suggest that above-benchmark investment is associated with greater assurance service substitution, greater audit risk coverage, and a higher degree of external audit reliance on internal audit work product. Exploratory analyses also quantify internal audit’s value-add beyond assurance service substitution. Our results are of interest to organizations which must choose their level of internal audit investment, regulatory bodies like the Institute of Internal Auditors, which establish subjective investment requirements, and capital market participants that rely on the work of internal auditors in their decision-making.
Internal auditor’s role in ESG disclosure and assurance: An analysis of practical insights
Eulerich, M. / Bonrath, A. / López Kasper, V. I.
Abstract
Using survey data of 107 internal auditors, we provide empirical evidence about internal auditor’s role in environmental, social, and governance (ESG) disclosure and assurance. So far, academics and practitioners have not agreed on the responsibilities of internal auditing in ESG matters. Our regression results give evidence for organizations’ and internal audit functions’ (IAFs) ESG maturity being associated with ESG reporting, while IAFs’ involvement in ESG shows a significant association with assurance of ESG reports. Our results support the notion that the environmental pillar is perceived as the core element of sustainability bearing the highest risk, therefore propelling the need for assurance. The imbalance between assurance and consulting activities on part of IAFs stresses the potential to position the IAF as a value-adding entity in a complementary relation towards external auditors. We further elaborate on IAFs’ non-involvement in ESG and demonstrate the respective lack of awareness on part of stakeholders. Our research provides valuable initial insights for internal audit practitioners in the field of ESG and implications for future research.