Organizational behavior topical requirement

The IIA issued the Organizational Behavior Topical Requirement (the Requirement), which establishes a baseline standard for Internal Auditors to evaluate how organizational behavior is managed through governance, risk management, and control processes. It reframes the concept of “culture risk” as the risk of behavior misaligned with strategic objectives.  

Below, we provide a summary of the Requirement. Find the full text of the Requirement here: Organizational_Behavior_Topical_Requirement_English  

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Organizational behavior

Organizational behavior refers to the actions, decisions, and interactions of individuals and groups within an organization, which directly impact performance and the achievement of strategic goals. When misaligned with those goals or stakeholder expectations, even well-intentioned behavior can result in negative outcomes for the organization and its broader environment. To manage these risks, control activities—like those used for other risk areas—should be effectively designed, implemented, and assessed. The Requirement outlines a risk-based audit approach to organizational behavior by establishing a standardized framework for evaluating the design and implementation of governance, risk management, and control processes tied to behavioral risks. The Requirement aligns with The IIA’s Three Lines Model, linking governance to board oversight, risk management to second-line functions, and control processes to first-line operational management.

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Governance

Evaluating governance in the context of organizational behavior involves determining whether board and senior management has clearly defined roles and responsibilities to prevent unintended consequences, established accountability for behavioral expectations, and implemented structured oversight processes including regular monitoring and challenge of behavioral risk indicators to ensure alignment between organizational behavior and strategic objectives. Oversight structures should be in place to monitor behavioral risks, ensure accountability, and address misconduct or misalignment promptly.  Internal Auditors must assess whether leadership (board and senior management) is setting the right tone and structures to influence behavior.  

Risk Management

Effective risk management requires the proactive identification, assessment, and response to behavioral risks that could affect the achievement of organizational objectives. These risks should be fully integrated into the overall risk framework, with careful consideration of underlying drivers such as incentives, culture, pressure, and decision-making dynamics. A robust behavioral risk management process includes identifying defining critical behaviors aligned with organizational objectives, establishing timely monitoring through meaningful behavioral risk indicators, identifying gaps between expected and actual behaviors, performing root cause analysis, and ensuring remediation actions are implemented, tracked to completion, and measured for effectiveness.

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Controls

Control processes must be intentionally designed not only to communicate expected behaviors but also to systematically identify and mitigate behavioral patterns that may pose risks to organizational objectives. This includes clear policies, training, onboarding, and performance reviews that identify and address behavioral risks. Internal Auditors should assess whether tone-setting and communication mechanisms are supported by structured feedback processes; whether protected reporting and escalation channels are effective; whether incentive and disincentive structures align with strategic and regulatory expectations; whether formal issue management processes identify, remediate, and escalate behavioral misalignment; and whether training, talent acquisition, and onboarding processes reinforce defined behavioral competencies.

The Organizational Behavior Topical Requirement is effective December 15, 2025 and applies to assurance engagements conducted on or after its issuance date.  For assurance engagements, the Organizational Behavior Topical Requirement must be applied; for advisory engagements, its use is recommended.  Internal audit functions must document how each requirement was assessed for applicability and retain evidence supporting any exclusions.  Incorporating behavioral risk into the Internal Audit function is essential for effective oversight, and the Topical Requirement User Guide provides practical examples that demonstrate how to apply these concepts.  

How we can help

Socorro Partners offers advisory solutions to help organizations evaluate and manage behavioral risks that impact culture, conduct, and performance.  We collaborate with Internal Audit and leadership to design and implement governance, risk management, and control processes promoting ethical behavior and strategic alignment.  Our professionals support Internal Audit teams in assessing the effectiveness of behavioral risk frameworks and enhancing oversight capabilities.

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