Does Country Culture Influence the Quality of Internal Audit?

Culture has big impact on almost every thing in our lives,from what we eat,how we dress to how we conduct business.Culture also determines how relationships in the society and within organizations are managed including those between  internal auditors and their customers!

I have had the pleasure of working in different countries with professionals from different backgrounds and cultures and have witnessed  first hand how culture plays a role (positive and negative) in the relationship between internal auditors and management.

 The influence of culture on relationships and business practices  may impact the quality of internal audit despite internal auditors' struggle to comply with IPPF and deliver the highest quality of audits!

Although many articles have covered this issue before,my goal in this post is to engage you in providing your thoughts and experience.Once I receive enough feedback ,I will put it together in a detailed post !

Please participate and share your thoughts and experience !

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Is Your Internal Audit Activity Still Stuck in The Past ?

One of the most exciting things I do every day is participation in /following of  discussions relating to internal audit with professionals around the world ,curtsey of technology and social media ! While most discussions prove how  the internal audit profession is adapting to change in business and technology ,there are signs that some internal audit functions are still stuck in the past !  I do not intend to ruin the celebratory mood of  those who are celebrating the release of the  PwC 2015 State of the Internal Audit Profession Study, I simply would like to remind myself ,and those who may be interested ,that the profession is still in need of continuous development and  the flexibility and willing to quickly adapt to rapid changes in business, regulations and technology A key player in this is the CAE ! Even with limitation of resources and lack of support ,a CAE with the right mindset and resolve can make a difference ! I have seen many CAE's performing beyond expectations under difficult circumstances.

Signs That Your IA Function is Still Stuck in The Past :

If any of the below situations apply to your IA activity, you may want to "wake-up" and buy a ticket to the express path to the future ( the present is already late !) :

 

• Isolation & Disconnect : If your IA  still finds itself not in sync with the rest of the organization , avoided by management and board ,not consulted or invited to meetings you should be very concerned!
• Technology is working against IA ,not for it: Your IA lacks in technology experience, use and knowledge and can not keep up with the technology advancement within and /or outside of your organization. I am still a big supporter of close co-ordination / integration with IT Audit ! I would like to see IA and IT Audit working together under  a Corporate Assurance Structure. This topic will be discussed in more details in a future post.
•  IA is not the provider of assurance on risk management, it is the risk ! I guess this one is self explanatory!
• Hiding behind independence to avoid  legitimate consulting assignments. This may be a result of lack of experience and/or self confidence or simply a traditional outdated mindset .
• IA did not yet make the crossover from the policing into the advisor mindset.
• IA is still re-active rather than pro-active with no real vision or initiatives towards the future of the organization and the profession.
• IA talks the talk, but does not walk the walk! Some internal auditors use big talk to describe their understanding of the profession ( risk -based ,COSO 2013,3LoD...etc),but when it comes to practice , they do not put these concepts to use! Actions speak louder than words.
• And most importantly ,IA fails to recruit, train and retain the best talent it can possibly get. Simply put, without trained committed and dynamic talent ,there is no future for internal audit.

The above is not intended to be a comprehensive list ,but rather examples of some of the signs .

Can you provide more examples and share your thoughts and experience !