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under Dividi
the c lt r l
e viro e t i to
l ers c reve l
the s rf ce deeper tr ths.
Bryant Richards and
Heather Richards
Pintachan
Under the Surface
Internal Auditor 51 quick scans of critical indicators, such
June 2024
B ture can bring good budgets are insufficient. Often pressed as unreasonable expectations, incen-
participated in the Pulse say their
ad organizational cul
companies down It’s a
tives misaligned with values, and an
to do more with less, nearly two-thirds
story that’s played out of audit leaders say they integrate gov- attitude of hubris. As with fraud red
over and over in the news enough so ernance and culture considerations flags, auditors are encouraged to iden-
that audit leaders are now well aware throughout their audit plan. Doing this tify and communicate compelling evi-
that culture is a risk can improve the quality of each review dence of significant cultural risks.
In thinking about risk at their own by adding more dimension — while However, to increase the value of
organizations, % of internal audit providing greater overall coverage. cultural audits, internal audit must
leaders rank governance and culture Another possible reason is that audit go deeper, exploring the foundational
risk as moderate, high, or very high, leaders find it challenging to justify characteristics of organizations that
according to the North American investing more resources into culture make them vulnerable to high-risk
Pulse of Internal Audit. That number audits. Culture audits may be seen as areas. Such depth requires a framework
is up from % in the
Pulse. And more resource-intensive, given the embedded with cultural expertise not
the recognition that culture is highly chronic and long-term impacts of cul- typically found within the profession.
impactful seems to be universal: In a ture issues compared to the acute
PwC Global Culture Survey of and seemingly more pressing nature an organizational
, leaders and employees, % of issues like cybersecurity risk and culture odel
said culture is even more important regulatory change. Edgar Schein, a Massachusetts
than strategy or operations. An added dimension is that audi- Institute of Technology scholar
Despite this sense of urgency and tors are not typically experts in culture. considered by many to be
risk, Pulse reports also show that inter- While often excellent barometers for the father of organizational
nal audit leaders have been allocat- identifying healthy versus toxic orga- culture, provides a frame-
ing a consistent
% to % of their audit nizational behaviors, internal auditors work for a deeper evalua-
plans to governance and culture since receive very little training or practice in tion of culture in his book,
. This category was the third low- assessing organizational culture. Organizational Culture and
est in the report for resource allo- The IIA’s updated Practice Guide Leadership. His organiza-
cation, ahead of only sustainability/ on Auditing Culture, to be released later tional culture model, often
nonfinancial reporting (%) and other this year, will provide the profession referred to as the Iceberg
risk categories that didn’t make the an approach tied to the Global Internal Model, divides the cultural
Pulse risk list (
%). Audit Standards. Even in its current environment into three lay-
What’s the story? One reason for iteration, the guide explains how to effi- ers: artifacts, espoused values,
the lackluster effort may be a lack ciently incorporate culture audits into and underlying beliefs. These
of resources, as % of leaders who other reviews allowing, at a minimum, layers can help internal audit
63 Internal Auditor 52 June 2024 INTERNAL AUDIT TODAY
