This paper is based on a theoretical analysis of the role of internal auditing in the accountability framework of contemporary corporate governance. We conceptualize the risk management rationale of internal auditing by drawing on the concept of accountability. We locate the emergence of internal auditing within the metamorphosis of capitalism. It is argued that this development produced the institutionalization of structural control of the firm to address the control problem in the inherently conflicting relationships that characterize accountability relations of capitalist enterprises. The exercise of control in this context entails ensuring accountability of employees, management and the board of directors to shareholders to increase profit. The extant literature does not provide an integrated conceptual framework that explains the role of internal auditing with a holistic view of this accountability landscape. This paper explains how the accountability relations of advanced capitalism create conditions that produce the demand for internal auditing as a risk management technology deployed to advance the managerial values of efficiency and effectiveness of the firm through assurance and advisory services.

Current literature on organizational change advocates the significance of 'strategy facilitation' on the part of the parent organization in the process of change imposed on the subordinate organization. Through this conceptual paper, resorting to the recent strategic changes Australian tertiary sector's constituents underwent in response to the Australian government's funding-specific policy changes for the sector, we argue that while 'strategy facilitation' by a 'power source' works to the advantage of subordinate organizations, 'strategy imposition' may work the opposite way. Externally dictated conditions for a change that leave an organization with no option but to submit passively to the pressure and adapt its core organizational elements for the sake of its survival, may result in the organization's demise in its real essence, as the organization sacrifices its true identity in an attempt to placate the external demand. Accountability dictates that such a change needs to be scrupulously checked and subjected to an independent enquiry before considered for implementation. We aim to develop theory- and logic-deduced propositions to help guide future empirical research into the area.