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Auditing culture: A new look at soft controls

02 / 06 / 2021
Audit functions within businesses in 2021 are in an interesting position post-pandemic as they now occupy a supportive role for informed business decision making. Audit has been a champion of business continuity, crisis management and recovery planning in the past few months and is now primed and ready to offer even more support to important parts of businesses, including company culture. 

Company culture is important because if you and your employees are working with a set of shared values, happiness and productivity increases, staff turnaround and its associated costs decline. By building a strong company culture you and your employees can help your business thrive. 

What is audit culture? 

Auditing culture means assessing whether the operating, investment and financing activities of your business, core behaviours, and the general ethical climate established from the top accurately mirror the desired values, policies, and appetite for risk of the company.  

Company culture checklist: 

  1. Know your values. Have a clear and defined sense of company purpose, hire those who share your values and ensure employees understand how their work contributes to those values. Review your purpose regularly. 
  2. Innovate and grow. Opportunities to learn from mistakes and grow should be present at both a company-wide and employee level. Encouragement to upskill should be present from the management level. 
  3. Recognise success. Successes, both large and small, should be shared and appreciated by everyone, everyday. Choose your rewards well and ensure they align with your core values. 
  4. Empower your employees. Integrate your values, help new employees fit into company culture through strong onboarding and encourage feedback at every level. 
  5. Lead by example. Leaders should foster connections with employees and be mentors not micromanagers. Leadership should be focussed on company culture and purpose. 

How you can audit your company culture with soft controls 

Company culture can be complex and hard to quantify or audit via focus on traditional hard controls such as policies and procedures. An audit focussed on soft controls; shared values, communication, trust, and openness is often a better indicator of the health of a company's culture. Soft controls also have a greater impact on an employee's individual behaviour and performance. They can even help pinpoint weaknesses in hard controls. 

Once you’ve made the case for an audit of culture using soft controls you need to pinpoint exactly what areas you wish to assess. Do you want to establish the general state of the culture company-wide or focus more on a specific area of the business? If you do wish to be more specific it is good to focus on areas of potential or existing cultural risk, such as locations or departments with poor feedback or high turnover. 

Consider your audit resources  

You can gain results and trust quickly by building a specialist team dedicated to auditing culture with skills in behavioural psychology and organisational design. However, this may not be the best use of resources as such teams cannot be reassigned to other areas of audit. This may be a more effective strategy for larger, more complex organisations with more capital. 

Obtain skills  

By obtaining the necessary skills on a more targeted and temporary basis, smaller businesses can achieve the same results more economically. Training existing audit teams in areas related to company culture and pinpointing existing skill sets can also be an effective model. 

Choose an appropriate method of audit  

Targeted audits around specific areas of risk can be useful for companies with a strong existing culture and previous history of cultural audit. If readiness for cultural audits is less developed, incorporating culture into a wide range of existing audit areas can set a foundation for later, more targeted audits. Examining all the evidence from multiple audits, be they focused on culture or wider internal audits can result in a broad view of company culture. 

Building your internal audit team 

Barclay Simpson is an international recruitment consultancy that specialises in recruiting professionals for the interrelated disciplines of Governance, namely Information/IT Security, Risk, Resilience, Audit, Compliance, Legal and Treasury. When you’re looking to build and secure your organisation for years to come, Barclay Simpson can help you quickly build a technically proficient internal audit function and team.  

Get in touch to support hiring audit professionals.