Organizational Learning Analysis of Internal Audit Process

Abstract

Environment changes surrounding business entities are becoming ever dynamic, uncertain, and rapid. An internal audit organization assesses the risks impairing business objective accomplishments and creates an annual audit plan from an entity-wide viewpoint to assess whether internal controls appropriately address such risks. It requires improvement actions where necessary. It will enhance business adaptability to environment changes and contribute to the management quality. On the other hand, organizational learning is gaining attentions as an academy researching adaptability to such environment changes. However, attempts to research such internal audit process in the context of organizational learning have been rarely made empirically and theoretically. Therefore, this research studies exploratory and proposes a theoretical framework on how an internal audit organization performs regular audits from an organizational learning perspective. Internal auditing was suggested for its contribution to environmental change adaptability through double loop learning.