How do auditors judge findings involving internal control breaches — and does it matter whether they are internal or external auditors? This experiment compared three groups of auditors:
• Internal auditors
• Interim internal auditors
• External auditors
They were asked to assess findings where internal controls were breached, under two motives:
• Personal gain (e.g., higher bonus)
• Organizational benefit (e.g., meeting a bank covenant)
The result: internal auditors were stricter than external auditors — quite surprising, since theory would predict the opposite. The greater the distance, the more independent and critical you’d expect them to be.an externe auditors.
👉 Does distance really make an auditor more critical — or not? And how sharp is your professional judgment?