CHAPTER 26 Ethics and Whistleblower Programs

Internal auditors have always been viewed as the ethical leaders in an enterprise. Whenever there have been questions of questionable dealings or fraud in operations, for example, the management response has almost always been to call on internal audit to investigate the matter. Because of their strong professional standards, supported by well-recognized professional codes of conduct, internal auditors are recognized and should be ethical leaders in the enterprise. They should be viewed as the enterprise’s ethical leaders.

A knowledge and understanding of an internal auditor’s professional code of ethics or conduct, as discussed in Chapter 9 along with both IIA and ISACA internal audit professional standards, are a key internal audit common body of knowledge (CBOK) requirement. Ethics and enterprise-wide codes of conduct have a much larger role in today’s enterprise beyond just the internal audit function. In years past, many enterprises mouthed words about their commitment to ethics but often never went much further. However, since the launch of the revised Committee of Sponsoring Organizations internal control framework, discussed in Chapter 3, as well as today’s Sarbanes-Oxley Act (SOx) rules, there has been an almost worldwide emphasis on the importance of establishing an ethical environment throughout the enterprise. While internal audit has had a continuing role here, many of these initiatives have been launched through enterprise ...

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