Professional ethics and the internal auditor
3. The four principles
- Integrity: Professional integrity entails the integration of personal values (such as honesty, diligence and fair-mindedness) with professional skills and expertise. The internal auditor acts within the law and with integrity to their profession (such as its purpose, values and standards) and their organisation.
- Objectivity: The IIA describes objectivity as ‘an unbiased mental attitude that allows internal auditors to perform engagements in such a manner that they believe in their work product and that no conflicts of interest or quality compromises arise. Objectivity requires that internal auditors do not subordinate their judgment on audit matters to others’. Objectivity is important in audit work. Having an ‘unbiased mental attitude’ implies an ability to differentiate between beliefs and facts; and as Quellet (2010) notes ‘auditors need to focus on facts and to ignore, as much as possible, belief and opinions based on perceptions that are not substantiated by facts’.
- Confidentiality: Internal auditors will protect and safeguard the information that belongs to the organisation and will not use that information for personal gain or in any way that is contrary to the law. This principle is pertinent to internal auditors as they have access to a wide range of information and the employing organisation needs to be assured that accessed information will be treated confidentially. Internal auditors also gather information through interviews, and interviewees need to feel assured that the information provided will be treated appropriately.
- Competency: Competency is the principle that the internal auditor possesses the appropriate knowledge, skills and qualifications to carry out any audit work that they are assigned. Professional competency requires the internal auditor to perform all audit work in accordance with the International Standards, and to develop their skills and knowledge continually.
4. Organisational – professional conflict
Professional conflict can arise when there is a tension between the demands of the employing organisation and the requirements of the Code of Ethics. These tensions need to be managed by the internal auditor and the internal audit function.
How can organisational-professional conflict be minimised?
Summary
- Professional ethics are the moral rules and values that govern the way a group of people perform a task or use resources.
- Codified professional ethics protect the individual, the function, the profession the employing organisation and the public. They also develop high moral values within individuals that influence the ethical tone of the organisation and wider society.
- The IIA’s professional ethics are enshrined in the Code of Ethics. The four principles of the Code of Ethics are integrity, objectivity, confidentiality and competency.
References
Quellet, N. (2010), ‘The Political Realm of Internal Auditing’, Internal Auditor, June, pp. 39 – 42.
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