Title: Effective organisation and operation characteristics of Internal Audit Departments (IAD) in Greek hotel units (HUs): an empirical perspective

Authors: Christos Lemonakis; Fotini Voulgaris; Emmanuel Sifakis; Constantin Zopounidis

Addresses: Department of Finance and Insurance, Technological Educational Institute of Crete, Greece, 72100 Ag. Nikolaos, Greece ' Department of Finance and Insurance, Technological Educational Institute of Crete, Greece, 72100 Ag. Nikolaos, Greece ' Pancretan Cooperative Bank, 71110 Iraklion, Greece ' Department of Production Engineering and Management, Technical University of Crete, Financial Engineering Laboratory, 73100 Chania, Greece

Abstract: The Internal Audit Department (IAD) provides management with sufficient information to determine whether operations are functioning efficiently, effectively and according to management's goals. The paper attempts to investigate how a well organised IAD in the Greek hotel industry results in lower operating costs and higher quality of services offered. To this context, the research is based on qualitative data derived through questionnaires addressed towards 28 large luxury hotel units (HUs) in Greece. According to up-to-date theoretical and empirical literature, the results point out that the internal control is a crucial function in the firm and especially in the hotel industry, contributing to both the good reputation and the effectiveness of an HU. The findings suggest that there is a significant relationship between HUs size and efficiency and size of the audit department. Large hotels with well organised IADs are found to face lower risks in terms of false information and non-compliance with existing rules and legislation than HUs of smaller size.

Keywords: internal audit; hotel units; HUs; quality of service; QoS; hotel services; Greece; luxury hotels.

DOI: 10.1504/IJBPM.2013.054901

International Journal of Business Performance Management, 2013 Vol.14 No.3, pp.221 - 244

Accepted: 03 Oct 2012
Published online: 17 May 2013 *

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