As we know, internal audit teams can sometimes overlook company culture when identifying areas of risk and concern. A 2023 AuditBoard report, for example, found that 80 percent of the organizations it surveyed do not actively conduct audits or assessments of their culture.
This gap may also point to a larger concern, where internal audit teams may neglect to evaluate their own culture. Internal auditors act as doctors in a way, helping the organization assess risks and treat issues. As the saying goes: “doctors sometimes make the worst patients.” With this in mind, internal audit might potentially be missing critical insights into team culture that could improve its effectiveness and alignment with organizational values.
Indeed, many internal audit departments are so focused on being the watchdog for the rest of the organization, there is a tendency to neglect internal evaluations and self-assessments inside its own walls. By encouraging the internal audit team to engage in self-reflection, there are greater opportunities to pinpoint inefficiencies, revive slowing growth, and increase poor morale, which typically are symptoms stemming from a stagnant culture.
The Importance of Culture in Internal Audit
Culture, in its simplest form, is the guiding beacon for how the team functions, collaborates, and makes decisions. The team’s culture is a powerful driver that shapes both internal dynamics and external interactions. In an internal audit department, a strong culture not only leads to more precise and reliable audits but also fosters deeper, more trusting relationships with stakeholders and strengthens risk management capabilities. A positive culture empowers the department to be innovative, consultative, and agile. It also enables the internal audit team to respond more effectively to evolving demands. Ultimately, a robust culture elevates the audit function, positioning it as a strategic asset that supports the organization’s long-term success.
Signs the Internal Audit Culture Needs Change
When assessing your internal audit department, you might notice symptoms that suggest underlying cultural issues. Common indicators of a poor culture include, but are not limited to:
- Resistance to Change – This lack of adaptability to change, such innovative technology, is a sign of a culture problem as it demonstrates a lack of a forward-thinking mindset.
- Lack of Communication – Frequent misunderstandings and lack of information sharing might indicate a breakdown in communication within the team, which culture can be the root cause.
- Lack of Accountability – An environment where individuals avoid taking responsibility for mistakes or where there is a lack of follow-up on audit findings reveals a weak culture of accountability.
- High turnover – Employee retention is the ultimate sign of a team culture in which improvement is needed. Turnover is sometimes due to low team morale and a lack of engagement.
As internal auditors, we have experience evaluating the overall landscape to identify and assess potential risks that could impact the organization. We need to take that high-powered lens and turn the focus inward, examining our own team dynamics, culture, and processes to ensure they are aligned with our goals and effectively managing internal risks.
See Also, “Looking in the Mirror: What About Internal Audit’s Own Culture?“
Strategies to Improve Internal Audit Culture
If an assessment of your team culture finds that improvement can be made. There are several strategies that can be taken.
1. Start with the founding ideals – Set an unobstructed vision for the department that aligns with the organization’s broader goals. A clear vision and mission statement are essential for shaping the internal audit culture, as they provide direction and align the team’s values with the organization’s strategic goals. They help auditors stay focused on their purpose, promoting accountability, consistency, and a shared sense of purpose within the department.
2. Encourage Open Communication and Teamwork – Open communication and teamwork are essential in strengthening internal audit team culture by fostering transparency and collaboration across audit processes. Reshaping communication channels enhances the team’s effectiveness and builds trust with stakeholders. Encourage informal “water cooler” discussion and “open door” policies. Throw pizza lunches to bring the team together in an informal setting.
3. Embrace Innovation and Change – Embracing change and innovation strengthens internal audit team culture by encouraging adaptability and continuous improvement. When auditors are open to innovative technologies and methodologies, the team becomes more agile in responding to emerging risks and evolving industry standards. This forward-thinking mindset not only enhances audit effectiveness but also fosters a culture of learning and growth, positioning the team as a strategic partner within the organization. One solution can be to free team members up for training on new technology. Another is to encourage experimentation with the use of data analytics and artificial intelligence.
4. Foster a Flexible and Inclusive Team Environment – A dedicated team culture values the importance of team diversity and inclusion. By promoting diversity of thought and experience, while offering flexible work arrangements, leaders can enhance innovation, employee satisfaction, and retention. Inclusive decision-making processes that encourage input from all team members further strengthen collaboration and productivity.
5. Encourage a Learning and Growth-Oriented Environment – Internal audit departments should promote a culture of continuous learning by encouraging professional development, mentoring junior auditors, and fostering cross-functional learning. This helps auditors stay updated on industry best practices and adapt to the evolving risk environment. Additionally, it is critical to embed a culture of continuous improvement and one where teams learn from previous mistakes. Creating a commitment to learning is in alignment with the value of continuous improvement.
6. Incorporate a strong tone at the top – As we know, culture change starts at the top. Internal audit leaders must lead by example on the value of the department such as collaboration, accountability, innovation, and openness. Leaders should also recognize when the department is in line with the desired values and reward team members who exemplify the desired cultural traits, such as collaboration and innovation.
Internal Audit, Assess Yourself
Continuous assessment of its own department allows internal audit to monitor and approve team culture. Culture is the foundation that drives team effectiveness and morale. Just as the concrete foundation provides stability and support for the entire structure, a strong internal audit team culture underpins the effectiveness and resilience of the audit function. Healthy team culture fosters greater collaboration and cooperation, ultimately boosting the team’s impact on the organization. Much like a concrete foundation that demands significant effort and intention to reshape, internal audit team culture can be transformed and strengthened through purposeful actions and sustained commitment. 
Jesse M. Laseman, CIA, CFE is an internal audit consultant at Sikich with nearly 10 years of experience in financial services, government, and not-for-profit sectors, specializing in operational audits, internal controls, data analytics, and Sarbanes-Oxley (SOX) compliance.