Soft Controls; Auditing Perspective

Hard controls, ineffective soft controls can impede the achievement of organisational objectives.

Due to major frauds and corruption scandals that have occurred in the recent past, In the recent past, lots of emphasis has been put on implementing soft controls. Supervisory and regulatory authorities have called for soft controls and in some sectors, legislation and regulations have been developed.

To date, internal auditors have devoted a great deal of attention to standards frameworks and hard controls in terms of design, existence, and operating effectiveness. But behavioral and cultural aspects, the soft side, are less frequently addressed as there are no standard guidelines, standards, or frameworks to follow. Because controls have an influence on people actual behaviour which can be evidenced by their actions.

Although best practices required organisations to integrate adequate soft controls into their internal control framework, soft controls are an essential part of governance and internal control, the internal audit function should include their assessment into its audit planning and audit procedures.

Soft controls generally concern less concrete or less directly visible measures that indirectly contribute to achieving organisational objectives but Internal auditors are becoming increasingly aware of the importance of soft controls in achieving business objectives. It is not possible to audit the governance and internal control of an organisation, process, or activity without considering the people in the people/process/system

A soft controls audit can be conducted in various ways depending on the maturity of the organisation, it is critical to start with examining the current situation about soft controls in the organisation. This increases the awareness of management and the rest of the organisation and the IA gains experience that is essential for performing a proper soft controls audit.

Internal auditors can also choose any method from several techniques at their disposal when performing a soft controls audit. However, before choosing from these techniques, it is important to stress that Internal auditors need to be aware that different types of questions should lead to different techniques and then to appropriate analytical methods and reporting formats. These techniques include conducting surveys, facilitated workshops, behavior observation and games

Soft controls audit reporting

Since soft controls often relate to people’s behavioral aspects and sensitivity of the issues raised, great care should be taken care of during reporting. This can be enhanced by ensuring that the results of the audit to be communicated in a careful, transparent manner since there are no strict standards or frameworks for testing. The auditor must be capable of gaining insight into the subject of the audit and must make arrangements on how the results are presented.