Sourcing of Internal Auditing: An Empirical Study

Posted: 11 Oct 2006 Last revised: 25 Jan 2012

See all articles by Roland F. Spekle

Roland F. Spekle

Nyenrode Business University

Hilco J. van Elten

Erasmus School of Health Policy & Management

Anne-Marie Kruis

Nyenrode University

Date Written: January 25, 2012


This paper studies the factors associated with organizations' internal audit sourcing decisions, building from a previous study by Widener & Selto (1999; henceforth W&S). In their study, W&S used Transaction Cost Economics (TCE) to explain the governance of internal auditing. Our study seeks to replicate their results, using newly collected data from 66 companies headquartered in the Netherlands. Our findings are supportive of W&S. Like W&S, we find asset specificity and frequency (both individually and in interaction) to be significantly associated with sourcing decisions. These findings are robust against different model specifications, and they hold across variously defined samples. We conclude that the W&S results are reproducible in different conditions, enhancing the credibility of the TCE-based explanation of organizations' internal audit sourcing practices.

Keywords: Internal auditing, Sourcing, Make-or-buy decisions, Transaction Cost Economics

JEL Classification: M40, M46, G34

Suggested Citation

Spekle, Roland F. and van Elten, Hilco J. and Kruis, Anne-Marie, Sourcing of Internal Auditing: An Empirical Study (January 25, 2012). Management Accounting Research, Vol. 18, No, 1, pp. 102-124, 2007, Available at SSRN:

Roland F. Spekle (Contact Author)

Nyenrode Business University ( email )

Straatweg 25
P.O. Box 130
Breukelen, 3620 AC

Hilco J. Van Elten

Erasmus School of Health Policy & Management ( email )


Anne-Marie Kruis

Nyenrode University ( email )

3621 BG Breukelen

Do you want regular updates from SSRN on Twitter?

Paper statistics

Abstract Views
PlumX Metrics