Being more successful with Soft Controls

This report contains the findings of a study into the extent to which Internal Audit Functions (IAFs) conduct audits focused on culture and behaviour (C&B), the extent to which C&B is discussed in the meetings between the IAF and the Audit Committee (AC) and the ambitions of IAFs in this area.

Much has been published about C&B in recent years. This publication occupies a unique position in the literature on this topic. It does not focus on the importance of the topic, the possible role of the IAF or the research methods, but on the state of affairs, the ambitions and the tools to achieve these ambitions. In a careful process, the working group defined a practical theoretical framework for this, conducted a survey among Chief Audit Executives (CAEs), discussed the survey results in interviews with a number of Supervisory Board members, and reflected on them in a roundtable meeting with participating CAEs.

The report contains a number of key insights and tools, which are elaborated step by step and summarised in a clearly structured way in a concluding section. What is striking in the findings in any case is that many IAFs want C&B to receive more attention, and that the IAF is the main internal supplier of C&B-related audits and the Supervisory Board / AC is seen as an important sponsor, but also that CAEs need to take the initiative on this and ‘pitch’ such audits.

The report is an excellent tool for (even) further integrating C&B in management, auditing and supervision. In addition, it provides CAEs with an excellent point of reference for benchmarking their own situation and ambitions and entering into discussions with their Management Board and Supervisory Board / AC. It would be good if the publication also triggered a further professional debate in which the following question can be raised: How can the increasing attention paid to C&B deliver not only effectiveness, but also efficiency for audits that currently still rely primarily on hard controls?