Intellectual capital in internal auditing: a review

Abstract

Today’s business survival is always allied to the people behind it. Strategies and success are created and driven by individuals. Indeed, the knowledge, expertise and skills that one possesses is like one precious gem stone that money cannot buy (Brooking, 1997; Bontis and Fitz-enz, 2002; Roos et al. , 2005). It is an intangible asset and commonly termed as intellectual capital (IC). Though IC has no physical form nor is it easily measured in monetary form, nevertheless, it is extremely important to appreciate and appropriately manage IC particularly to upbeat positive corporate performance (Bontis et al., 2000; Usoff et al. , 2002). IC is frequently referred as intangibles that includes information, knowledge, skills, experience, innovation, customer loyalty, patents, trademarks, relationships and intellectual property will force innovation and value creation of an organization (Bontis et al. , 2000; Usoff et al. , 2002; Tayles et al. , 2007). Indisputably, the existence of IC in the global business would allow companies to gain a competitive edge and promote sustainable growth of the business. It is evidenced in Bontis et al. (2000), Bontis and Fitz-enz (2002), Usoff et al. (2002), Pek (2005), Roos et al. (2005) and Tayles et al. (2007) that IC is a positive attribute that influences corporate performance. The importance of IC, particularly human capital is highlighted and documented in The Ninth Malaysian Plan. Human capital is stressed as one element that is crucial to achieve the nation’s mission.