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Chartered Institute of Internal Auditors calls for organisational culture audit

The Chartered Institute of Internal Auditors (IIA) has called for both public and private sector boards to audit their organisations' corporate culture and behaviour in a report published this week.

IIA's report, Culture and the role of internal audit, looking below the surface, argued that in order for companies to guarantee the behaviour needed to meet their organisational goals and manage risk, their boards must start to clearly define and communicate the culture they require.

Measurable policies and systems then need to be established and subject to close monitoring and reporting by internal auditors, the report suggested.

IIA chief executive Ian Peters said: "As organisations come under increasing pressure to demonstrate their commitment to improving standards of behaviour they must focus more closely on getting the underlying culture which dictates those behaviours right."

Peters added: "On the basis that what gets measured gets done, they must take seriously the need to audit their progress in addressing the need for change."

In particular, the report has called for auditors to undertake root-cause analysis in identifying cultural weaknesses, measure the influence of culture and values on business decisions and include indicators including recruitment policies, training, performance management and reward.

It also stressed the importance of auditing throughout the organisation, not merely its senior management, and recommended auditors to trust their judgement, "even if at times it means taking a subjective approach".

Related link:
Culture and the role of internal audit, looking below the surface

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