Integrity, Confidentiality and Professional Behavior of Internal Auditors

* Be open and honest, act with integrity and uphold the reputation of their profession

Corporate insiders must act in good faith and in a manner that they reasonably believe will be in the best interest of the corporation including safeguarding corporate information. Also they have a duty to care for the corporation as they would their own. So in this case, the insider who has to be loyal to his company and may not be able to go to the authorities with information that can damage the company’s reputation also has to care for this same company and in caring means if there is anything unethical going on should be able to whistle blow it, however this creates conflict for the insider. It’s like they are stuck in between, however way you look at, whether they report it or not, they are damned as the book stated because once authorities know, the company might suffer public humiliation and if they don’t report it, the company eventually will collapse due to everything blowing up just like Enron.

In the health care environment financial practices and ethical care finance is very important to produce successfully organizations. In the health care industry and in any business ethical and financial practices are adopted to increase the organization value and consumer confident as well as protected the services or products provide by the organization and maintain the organizations brand name. In the health care industry no patient will want to attend a hospital in which the dead rate is above 50 percentages annually, it will

In Ronald Duska’s “Whistleblowing and Employee Loyalty,”Duska describes the conflict that occurs between the act of whistleblowing and the obligation for an employee to be loyal to their employer. To understand this conflict, one must first understand what a whistleblower is, a whistleblower is one who spotlight neglect or abuses within their own professional organization. The conflict occurs because an individual is incriminated their own workplace, which can cause conflict among the employees and the employer. The question becomes is whistleblowing ethical? Or is it unethical because it is going against the interests of the professional organization.

“A court employee shall regard the ethical duties provided in this code of conduct as having

In the Enron case, The Securities and Exchange Commission (SEC) and Congress conducted an investigation into Enron's collapse. The authorities re-examined the roles of corporate watchdogs, including corporate boards of directors, auditors, investment banks, credit rating agencies and lawyers. It could be that the watchdogs had too tight relations with the company's executives. That is why no one questioned the Enron's aggressive accounting strategies. To prevent such collapses, someone needs to look into the possible conflict of interest. The dilemma is that auditors should perform in the interests of the investors, but they are paid by the audited company, which makes it more difficult for them to exercise tough decisions. The auditors should not perform some particular consulting services for the firms that they audit. Another belief is that there should be more severe consequences for those committing financial crimes and causing fall of the companies.

The concept of a whistleblower is that of a person who decides to report unethical or illegal actions of or within their place of employment. From the text, an extension of the previous definition goes on to say, “They may be working for private companies, nonprofit organizations, or for the government. They may disclose information inside or outside their organizations—to supervisors, regulators, or to the media.” (Halbert & Ingulli, 2012, p.47) Based on the definition, anyone of us can be a whistleblower. It doesn’t seem that the information disclosed is limited in anyway. Although, some of the information may not be protected

In a post Yates world , organizations seeking cooperation credit (in both civil and criminal matters) must disclose all relevant information related to the misconduct, and must include specific information about individuals involved in the misconduct.

Jackson and Raftos (1997) referred to whistle blowing as an avenue of last resort. Employees find themselves in these situations when the authorities at their organisations have failed to take actions on reported issues affecting that organisation. Wimot (2000) likened whistleblowing to a spectrum. At one end of this spectrum whistleblowing would only cause minimal pain and scars on the stakeholders and organisation while on the other end is the worst scenario where the whistleblowing effects are turbulent and often experienced to be negative to all those involved (ibid).

The company should hire it’s own internal auditor’s to ensure that the staff understand the company’s accounting procedures. This also helps the external auditor as it give the external auditor another viewpoint when assessing fraud risks. The internal auditors are apart of those charged with governance and that helps take the pressure off of the external auditor if a fraud should be discovered.

* “Members will comply with all fair and reasonable obligations created by the contract (HFB code of ethics).”

Furthermore, there are multiple ways of reporting the concern internally. Group CRO explained: “we have whistleblowing mechanisms that go to HR, or go to Internal Audit function, who are very independent, and their independence is fearlessly protected. And if you have a concern about that Head of Internal Audit, you can go to the members of the Board, if you have got concerns any of the members of the Board, you can go to the senior independent director., and so.” (Group CRO)

Internal auditors cannot effectively provide an analysis on the company’s internal dealings as they are part of the company. External auditors, however, can observe these processes from the outside and then determine where the funds of the company and whether the dealings adhere to the regulations. Using external auditors in a company prevents conflict of interest from happening. Conflict of interest is a situation where an individual or organization has multiple interests and of those multiple interests, one could possible corrupt the motivation for an act on the other when the auditor has any kind of beneficial interest in their client’s performance. In other circumstances, there is also the threat of familiarity where auditors become

The internal auditor have a several roles in the company which is the first one the audit committee need to discharge and restrict the governance responsibilities and the

The role of internal audit is to provide independent declaration that an organization’s threatadministration, governance and internal control processes are functioning effectively. Internal auditors deal with concerns that are essentially important to the existence and success of any organization. Unlike external auditors, they aspect beyond financial possibilities and statements to reflect wider problems such as the organization’s reputation, development, its power on the location and the approach it treats its organizations.In summary, internal accountantssupport organizations to thrive.