Learn at Lunch: Ethical Dilemmas in Profession and Management
An Internal Auditor’s Moral Compass
“Internal audit is the last line of defence and it plays a key role in uncovering fraud. The right thing to do is not always easy. Internal audit needs to have the courage to stand up and uphold the truth when it detects evidence of wrongdoing at any level in the organisation,” said Professor Lim Soo Ping, Professor of Accounting (Practice), Singapore Management University. This was the key takeaway from the Learn At Lunch talk held on 8 November 2018 that saw an attendance of over 30 internal audit professionals.
Professional ethics is not a new concept in the internal audit profession, but its relevance is increasing in the wake of continuing reports of corporate board failures. Internal audit is a key instrument of the board in the execution of its oversight responsibilities.
For the internal audit profession, the risk of ethical dilemmas is inherent. Internal auditors are often put in a position where they must make audit inquiries that are particularly uncomfortable or inconvenient for management. The Institute of Internal Auditors’ Code of Ethics offers a clear set of principles and expectations governing the behaviour of individuals and organisations in the conduct of internal auditing. This Code of Ethics, guided by the principles of integrity, objectivity, confidentiality and competency, is grounded in the fact that the board, management and stakeholders place a high level of trust in the function of internal auditing.
“If an internal auditor does not demonstrate ethical practice, this would be a risk for the organisation as it depends on internal audit being professional in carrying out its responsibilities. In an extreme situation, the internal auditor may need to whistle-blow. We have heard of cases of whistle-blowers subsequently having a hard time. Acting ethically has its consequences. But the Code says that an internal auditor should report wrongdoing. That’s the moral challenge,” added Professor Lim when he explained the ethical dilemma risks.
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