The Influence of Competence, Integrity, and Compensation on Internal Audit Units Performance

Abstract

Internal audit units (SPI) at State Islamic Universities face significant challenges in ensuring effective and accountable governance. These challenges arise from limited technical competence, inconsistent integrity practices, and a lack of equitable compensation systems. This study aims to examine the influence of competence, integrity, and compensation on SPI performance, focusing on their direct and mediated effects. The novelty of this research lies in exploring the limited role of compensation compared to intrinsic factors like competence and integrity in enhancing internal audit functions. A quantitative research design was employed, involving 120 SPI personnel from various universities. Data were collected through structured surveys and analyzed using Structural Equation Modeling (SEM). Results showed that competence and integrity positively and significantly impact SPI performance, with competence being the most dominant factor. Integrity also mediates the relationship between competence and performance. However, compensation did not have a significant direct or mediating effect on performance, indicating the greater importance of intrinsic motivators. The findings emphasize the need for improving SPI competence through technical training and fostering a culture of integrity via ethical programs. Compensation should still be fair but should not be the primary focus. These results provide actionable insights for policymakers and educational leaders to enhance the effectiveness of internal audit units in higher education.