Bharat Petroleum: Redesigning the Internal Audit Organization
(6 pages of text)
In 2014, Bharat Petroleum Corporation Limited (BPCL), a large, government-owned, global, Fortune 500 petroleum refining and marketing company in India, was facing a variety of issues around its audit process. The internal audit department had been facing delays in completion of audits and compliance of recommendations. The executive director and head of the Internal Audit (IA) department believed that performance problems were due to the organization of the department. Changes were needed to the processes, technology, and structure of the department, and he wanted his team to find solutions to put some fundamental changes in place. What changes should be made to IA’s processes, staffing, and structure so the company could complete more audits and comply with the recommendations?
This case is suitable for use in graduate-level courses on organizational theory, organizational development, change management, organizational behaviour, corporate governance, accounting, and finance. For a class that is unfamiliar with internal audit, this case can be used to discuss topics such as operational risk, internal controls, and internal versus external audit. For a class acquainted with corporate governance, this case is suitable for discussing whether internal audits should be outsourced or reported to the audit committee. After working through the case and assignment questions, students will be able to
- analyze causes of poor performance including the influence of structures on organizational performance;
- explore strategies of control and change;
- propose solutions including those about processes, technology, staffing, and structure of a department;
- discuss the role of internal audit in risk management and good governance; and
- consider change management strategies.
India, Large, 2014
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