ethics - The Institute of Internal Auditors South Africa

Internal audit professionals gathered at the
IIASA KZN Region Function hosted by the
KZN local chapter to discuss Ethics in relation
to the Internal Audit profession.
The event was well attended by internal
auditors from across the public and private
sectors and they were treated to a thoughtprovoking
and topical presentation focusing
on Ethics and the challenges facing individuals,
organisations and our profession
as a whole, in supporting a change in culture
and promoting more ethical behavior.
Guest speaker, Sean van der Merwe, Associate
Director at Deloitte, focused on the
challenges of ethics and shared some of his
insights from his research and his extensive
experience.
Sean made the point that “Ethics is a particularly
interesting and challenging topic because
it hardly ever has a simple “yes or no” or
“black and white” answer. He added that “we
cannot aff ord to make snap decisions in assessing
whether something is right or wrong,
before seeking the full facts of each case”.
A further interesting point to ponder: “We
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IIASA KZN REGION FUNCTIONS: ETHICS AND THE INTERNAL AUDITOR
are no longer alarmed by the incidence of
ethics failures and fraud – perhaps only by
the magnitude. We have come to almost
accept it!”
It is evident that professionals need to be
knowledgeable in, and enforce the IIA code
of ethics, in order to continue to enhance
the credibility of the profession.
Sean also encouraged the delegates to
increase focus on ethics audits and noted
that internal audit professionals should be
aware of the factors evident when employees
commit fraud or unethical behaviour
- “Generally in cases of fraud, corruption
or unethical behavior there will always be
some kind of motivation, an opportunity
such as weak controls, as well as the employees’
own justifi cation”.
On the above note, he made the point that
internal auditors are most experienced and
comfortable when addressing 'opportunity',
in testing the internal controls and making
recommendations about them. They
should be encouraged to start developing
skills to recognise and understand the mo-
Alex Winterbach, Manager: Internal Audit, Risk and Compliance Services
tives, and possible justifi cations used by
individuals when committing fraud. It is
clear that auditors can no longer solely rely
on fi nancial indicators of fraud, but should
also be able to recognise nonfi nancial indicators
of fraud and fraud red fl ags.
Sean shared some thoughts on Business
Ethics and Ethical leadership as outlined in
The King Report on Corporate Governance
and other best practice, and provided some
very interesting tools to assist in dealing
with ethical dilemnas, including ‘the PLUS
factor’, which suggests that in considering
an action one should determine whether
it transgresses any policies, laws, universal
behaviour or Self (being your own moral
compass).
In closing, Sean provided some hard-hitting
quotations, one of which follows:
“If you don't have integrity, you have
nothing. You can't buy it. You can have
all the money in the world, but if you
are not a moral and ethical person, you
really have nothing" - Henry Kravis.
IA ADVISER September 2011 | 15