Culture as a Hidden Variable in Internal Audit Quality

 

In the world of internal audit, we often speak of independence, objectivity, and adherence to global standards. But beneath these pillars lies a subtle force that shapes how audit functions operate across borders: national culture.

I believe that transformation begins not just with frameworks, but with cultural fluency. Here’s why:

🌐 Culture Isn’t Just Context—It’s Infrastructure

Audit quality is not solely determined by technical rigor or regulatory compliance. It’s also shaped by how leadership is perceived, how risk is tolerated, and how truth is told. These are cultural variables.

• In high power distance cultures, auditors may hesitate to challenge senior executives, even when findings warrant escalation.

• In collectivist societies, preserving harmony may take precedence over whistleblowing or direct confrontation.

• In low uncertainty avoidance cultures, audit planning may be more fluid, with less emphasis on exhaustive documentation.

These aren’t flaws, they’re realities. And they must be acknowledged if internal audit is to evolve meaningfully.

🧭 The Strategic Role of Cultural Intelligence

For boards and audit committees operating across geographies, cultural intelligence is no longer optional. It’s a strategic imperative.

• Risk assessments must be calibrated to local norms of transparency and disclosure.

• Audit methodologies should flex to accommodate regional expectations around evidence, formality, and communication.

• Tone at the top must be modeled in culturally resonant ways; what inspires trust in Tokyo may not translate in São Paulo.

🔍 From Compliance to Credibility

Audit transformation isn’t just about automation or analytics. It’s about credibility. And credibility is earned when auditors understand the cultural terrain they’re navigating.

At AdapGility Consulting, we help organizations move beyond checkbox compliance to build audit functions that are globally aware, locally effective, and strategically aligned.

Internal Audit Month

 May is Internal Audit Month, a time to celebrate and promote the vital role of internal auditors worldwide. This year, the Institute of Internal Auditors (IIA) is making it a global initiative, encouraging participation from 117 National Institutes and 144 North American Chapters.

How to Get Involved:
1. Join the Global Celebration – On May 2, 2025, share unified social media posts using the hashtags hashtag#OneIIA and hashtag#InternalAuditMonth.
2. Promote the Profession – Use your platforms to highlight the value of internal auditing and share your own experiences.
3. Engage with Your Network – Respond to comments and discussions to keep the conversation going.

Internal auditors play a crucial role in ensuring organizations run efficiently, manage risks, and uphold governance standards. This month is all about recognizing their contributions and raising awareness.
hashtag#OneIIA and hashtag#InternalAuditMonth hashtag#iia hashtag#internalauditors hashtag#auditcommittee hashtag#cae hashtag#celebration

Are You Ready for the New Global Internal Audit Standards?

 With the Global Internal Audit Standards set to take effect on January 9, 2025, it is crucial that the audit committee is well-prepared and familiar with these standards. To assist with this, we have created a brief presentation designed to equip audit committee members with essential information.

Reach out to us to schedule an in-person or remote presentation.

Is Climate Change a Greater Risk in the Middle East than Geopolitical Risks?

 Is climate change a greater risk in the Middle East than geopolitical risks in the next three years? According to the 179 respondents to the IIA Foundation's "2025 Risk in Focus—Middle East" survey, it seems so!

Geopolitical risk in the Middle East is real and should definitely be among the top five risks on the list of emerging risks. Anyone who disagrees is out of touch with reality!"

CAEs in the region often avoid addressing what could appear to be politically sensitive issues, which is understandable given the context. However, CAEs, in our opinion, must give more serious attention to the impact of geopolitical risks on their region and organizations.

“Is AI a Potential Existential Risk?”

 Many people recognize the advantages of AI in both professional and personal realms. However, it comes with several risks, such as some of the examples outlined below. While there is broad consensus on many of the risks, few are more contentious, such as the potential existential risk as discussed in the infographic below. I’ve been keeping up with expert discussions on this topic and am still trying to form an opinion on it. Time will tell whether it is a genuine concern or just undue worry.

What do you think?

Takeaways from my 2023 ethics CPEs

 As you are aware, licensed CIA's are required to take at least two hours of training in the field of ethics. I have just completed mine and I would like to share with you some takeaways:

1. Becoming the everyday ethicist:

This session was presented by Amanda Erven. The one technique I liked about how to achieve this objective is by developing your own personal value statement and code of self-conduct! It is a great idea. I encourage internal auditors to adopt this important step towards becoming an everyday ethicist.

2. Exploring workplace honesty and ethical gray areas:

This session was presented by Christian Miller. I liked his discussion regarding the differences between an honest person and someone who exhibits honest behavior as shown below.

Finally, I came across a white paper by IIA Australia entitled "Why people do not accurately disclose their conflicts of interest". Here is a paragraph from it:

"There are three significant ways in which people withhold information about conflicts of interest:

1. People do not disclose conflicts of interest
2. People only partially disclose conflicts of interest
3. People give misleading disclosures that result in information being hidden

These are referred to in this White Paper as the sides of the ‘Conflict of Interest Bermuda Triangle’. Examining the reasons people do not make full disclosures of conflicts of interest will help us improve disclosure systems and internal controls over conflicts of interest."

Please share your takeaways from your ethics training with the group so we can raise awareness of the importance of ethics in our lives.

Internal Audit has a role to play when it comes to mental health!

 

Internal Audit has a role to play when it comes to mental health! It starts with ensuring that its own staff are enjoying good mental health.

Internal Audit can play a vital role in helping the organization promote and improve mental wellness and provide assurance on the effectiveness of the organization's policies and practices and provide insight that can help improve them.

More details are discussed is an older post:

My Thoughts: Internal Audit and Mental Health! (waelbibi.blogspot.com)