Isomorphism of Internal Audit Functions of Higher Education Institutes in Israel

Refael Aviram, Pace University

Abstract

Based on an investigation of institutional and agency theories, one might assume that legal forces will compel organizations in a certain organizational field to establish isomorphic structures. Thus, for example, it could be assumed that in Israel, compliance with the Internal Audit Law–1992 (IAL-1992), which was passed over 20 years ago and obliges a wide spectrum of organizations to appoint an internal auditor, suggests that organizations will establish isomorphic internal audit functions (IAFs). Interestingly, this study reveals that while the IAFs are in place in institutes of higher education, the structure of these IAFs tend rather to be less isomorphic in nature. This discrepancy is investigated through the research questions posed here, ‘What are the forms of IAFs in universities and colleges in Israel? And why are these IAFs less isomorphic?’ Using a mixed method of qualitative and quantitative analyses assists us in revealing some answers to this puzzle. Israeli higher education institutes comply with the IAL-1992 in two major forms: in-house and outsourced IAFs. By choosing the latter, the institutes increase their command over the IAF and reduce their associated costs. Significant differences between the institutes were discovered in the annual number of audit hours allocated to audits and in the levels of reporting channels. While analyzing the statistical results and the interviews conducted for this study, institutional logics theory receives support when the commitment of senior management to internal auditing is found to be a significant variable in explaining the variance in the less isomorphic character of the IAFs. In some cases, it was found that senior management elects to minimize the number of audit hours and to lower the level of reporting channels. This might jeopardize the “added value” and effectiveness of internal auditing in those institutes.

Subject Area

Management|Higher Education Administration|Middle Eastern Studies

Recommended Citation

Aviram, Refael, "Isomorphism of Internal Audit Functions of Higher Education Institutes in Israel" (2014). ETD Collection for Pace University. AAI13421979.
https://digitalcommons.pace.edu/dissertations/AAI13421979

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