People First: Enhancing HR Through Assurance

Presenter: Liz Sandwith, CFIIA

Date: Tuesday, August 19, 2025

Time: 1:00 p.m. – 2:45 p.m. ET

Location: Virtual

CPE Credits: up to 2

Human Resources (HR) is a fundamental function within any organization, responsible for managing its most valuable asset— its people. The HR department oversees various activities such as recruitment, training, payroll, compliance with employment laws, and employee relations. Given the complexity and sensitivity of these activities, there are inherent risks that need to be carefully managed to ensure organizational effectiveness and compliance with relevant laws and regulations. Internal audits play a vital role in identifying and mitigating these risks. This article will explore the key internal audit risks related to human resources, providing a detailed analysis of the challenges and strategies to address them.

HR functions tend to be busy, and it can be tempting for them to focus on daily tasks and skip the longer-term view. If as an internal audit function, you adopt a risk-based approach, it may be that HR function isn’t assessed as high risk, nevertheless an HR audit can improve the efficiency of daily HR processes and save the HR team precious time and resources. One of the challenges facing internal audit is to contribute to the organizations efficiency and effectiveness and add value. An HR internal audit engagement should achieve both goals.

When conducting a Human Resources (HR) internal audit, it's crucial to identify and manage key risks and implement effective controls to ensure compliance, efficiency, and overall organizational effectiveness.

Learning objectives:

At the end of the webinar, you will have, a better understanding of the key elements/topics of an HR internal audit engagement:

✅ Recruitment and Selection Risk

Recruitment and selection risk refers to the risk that the organization may hire individuals who do not possess the necessary skills, qualifications, or cultural fit for the role, leading to performance issues, increased turnover, and potential legal liabilities. Effective recruitment and selection processes are essential to building a competent and motivated workforce.

✅ Compliance with Employment Laws and Regulations

Compliance with employment laws and regulations is crucial to avoiding legal liabilities, financial penalties, and reputational damage. Employment laws govern various aspects of the employment relationship, including working hours, wages, health and safety, and employee rights.

✅ Employee Relations and Retention Risk

Employee relations and retention risk refers to the risk of deteriorating relationships between the organisation and its employees, leading to reduced morale, increased turnover, and potential legal disputes. Effective employee relations and retention strategies are essential to maintaining a motivated and committed workforce.

✅ HR Data Management and Privacy Risk

HR data management and privacy risk refers to the risk of unauthorised access, misuse, or loss of employee data, leading to potential legal liabilities, financial losses, and reputational damage. With the increasing use of digital HR systems, protecting employee data has become a critical concern.

✅ The risks associated with Artificial Intelligence (AI) in relation to HR.

AI can significantly enhance HR functions, but it also introduces several risks that need careful management e.g., bias and discrimination, lack of human oversight, legal and ethical compliance, transparency and accountability.

 

Liz was a member of the IIA Standards Board and is now a member of The IIA PCB (Professional Certifications Board). Liz is an Internal Audit and Risk Adviser sharing and supporting internal audit functions and CAEs based on her 36+ years in the internal audit profession. Liz worked in a senior capacity at Bupa as Head of Assurance, Risk & Compliance and Head of Internal Audit - Operations. Liz was also Head of Internal Audit at Channel 5. She has also worked with the Information Commissioner’s Office and the Electoral Commission, as well as advising local authorities on internal audit and risk management issues. Liz is a Trustee for a Multi-Academy Trust (education sector), a Chair of Governors and Chair of the Audit, Risk and Finance Committee.