Workforce issues such as recruitment, retention, diversity, and business conduct are often the expression of a company’s commitment to good values. A company with poor values is probably going to have confused and disgruntled employees. So it should be no surprise that human resource (HR) issues have been at the forefront of major business frauds or reputational breakdowns for years.
Internal auditors already evaluate parts of the HR function when they evaluate the “control environment” under the COSO framework, including tone at the top, the organization’s ethical climate, and management’s philosophy and operating style. All of those collectively comprise the corporate culture. Reviewing them is critical and challenging, yes, but auditors must also examine other emerging risk areas in the HR function if they want to achieve the best culture possible.
