The Institute of Internal Auditors has published a practice aid that serves as a kind of mid-year reminder to internal auditors to assure a company’s governance is rooted in the those critical intangibles—integrity and ethics, for example—that steer people in the right direction.
The practice guide, titled “Auditing the Control Environment,” is a compilation of lessons learned over the past several years about how fraud and financial failures get started, says Beryl Davis, IIA vice president of standards and guidance. One of the key lessons is the realization that integrity, ethics, and management operating style have just as much to do with a company’s control environment as do the traditional internal controls, she says. The practice guide provides some reminder guidance to internal auditors on how to focus on and audit those “soft controls” to assure the organization is on the right path.
