What Drives Internal Audit Performance Measurement in Central Banking?

This paper examines the key factors that drive the implementation and development of internal audit performance measurement systems in central banks. Data collected through a survey with worldwide coverage are matched with numerous sources including the International Monetary Fund and Statista. These data are analysed by means of regression analysis to detect the main determinants of the implementation of internal audit performance measurement system implementation and development. The main finding is that the adoption of internal audit performance measurement systems is strongly linked with both the institutional focus of the bank and the development of the internal audit unit, the latter being the most important factor in explaining also the development of such systems. This is the first attempt to analyze internal audit performance measurement systems in central banking. This study contributes to the literature on performance measurement in the public sector, which is mainly based on single-country analyses and rarely focused on central banks.