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Anja Bast - den Hollander

Towards a Compliance Theory of Internal Control

Research in the area of internal control is particularly motivated by the negative effects on organizations when internal controls fail. However, internal controls may also be looked upon as a tool of management, to contribute to enhanced operational excellence or as a component of the internal perspective as in the balanced scorecard (Kaplan & Norton, 1992). To reap the full benefits of improved internal controls, management and other personnel must understand the factors that drive the realization of internal control goals.

There has been surprisingly little research into the drivers of internal control goal realization so far. This is at odds with developments in practice where internal control seems to be a pervasive theme in a wide variety of settings. The revival of the COSO report (1992) after the Sarbanes-Oxley Act came into effect in 2002 is one of the most visible practical developments in the realm of internal control. Yet, this is not a theory. Any attempt to investigate factors that drive the realization of internal control goals or internal control deficiencies would lack a theory to generalize the findings. Therefore this PhD project will first pivot on the - rather ambitious - goal to develop a theory of internal control. Secondly, we will empirically test some components of such a theory and provide strands for further research in this area.

Anja Bast-den Hollander

Supervisor: Prof.dr. Eddy Vaassen RA