sighnov

the shareholder with the overall
performance and results of the
organization. (Governance structures
are by no means precluded from
interacting). All these governance
bodies have direct access to the
shareholder. How wonderful?
Where can fraud and corruption get
a chance with such tight governance?
Admi�ed, it will never be airtight,
but fraudsters will have to sweat to
Until we do that, we’ll forever
be chasing possible fraud and
corruption perpetrators only
after the action has been done
achieve what they want.
By allowing fraud and corruption
cases to be reported at this rate
without strategic countering,
governance bodies such as the
Institute of Internal Auditors and the
Institute of Directors are partly to
blame for the high incidents of fraud
– not as active participants, but as
passive participants! Most internal
auditors are not comfortable with
the position of internal audit in their
organization organograms, but are
afraid to say it because it may have
career limiting consequences. �e
institute of directors is quite aware
that until King III guidelines are made
legally enforceable, governance will
remain poor - but they do not push
for King Guidelines to be enforced.
Why?
Internal audit is one function that
could be relegated to the heap of
history if it does not re-invent itself
and position itself as a catalyst in the
�ght against fraud and corruption
– through proactive systems and
controls. Whenever fraud and
corruption incidents are reported,
one hears very li�le or
nothing from internal
auditors. �eir role has
become that of a lame
duck or a toothless bull
dog – bucking loudly,
but unfortunately not
able to bite.
To re-invent itself,
internal audit has to �ght for legal
recognition. �e current status is
that organizations may opt to have
or not to have internal auditors in
their structures. We need legalized
internal audit for these reasons:
�� Once given a legal standing,
internal auditors should
be elevated to report not
to management but to the
shareholder. This will give
internal auditors the necessary
muscle to do their work without
fear of reprisal from management.
�� Preventative controls will be
entrenched in all organizations.
�e likelihood of fraud and
corruption being reported once it
has occurred will be signi�cantly
reduced.
��
�� Inefficient, ineffective and
uneconomical control
environment will be discovered
and reported sooner rather than
later
�� On-the-job training for
inexperienced youths could
be housed in this department.
With a well run internal audit
department, managers have
a pleasure to recruit from the
internal audit department
because recruitees would have
had some exposure to business
processes and procedures within
the organization
�� Like external auditors, internal
auditors should have their reports
included in the annual reports
�� If legalized, so many new quality
job opportunities will be created
for youths entering the market –
this is where the job fund could
come in handy!
��
�� In conclusion, the re-vamping
of both the Institute of Internal
Auditors as well as the Institute of
Directors as e�ective Governance
structures will help achieve three
goals at once: Prevent fraud and
corruption before it happens;
Help with continuous training;
Help create quality employment
for the youth especially.
��
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