According to The Institute of Internal Auditors (IIA), "The integrity of internal auditors established trust and thus provides the basis for reliance on their judgement". IIA further added that to be integrity, internal auditors: * Shall perform their work with honestly, diligence, and responsibility. * Shall observe the law and make disclosures expected by the law and the profession. * Shall not knowingly be a party to any illegal activity, or engage in acts that are discreditable to the profession * Shall respect and contribute to the legitimate and ethical objectives of the organization.
According to the 2009 Global Integrity Survey conducted by Compliance Week and Integrity Interactive, polled more than 150 ethics and compliance executives at global companies worldwide. The survey shown that nearly two-third (64 percent) of respondents use risk assessment specifically to review their integrity risks and to modify their programs as necessary. It also shown that 57 percent said their internal auditors have periodically audit their integrity programs and functions. Besides that, the survey shown that nearly 80 percent of respondents commented they use the internal audit function to some extent. Melissa Klein Aguilar (2009) further added that internal audit departments play an important role in ensuring the effectiveness of the company's integrity function. IIA do also issue a guidance says that internal auditors should "evaluate the design, implementation, and effectiveness of the organization's ethics-related objectives, programs, and activities."
According to Institute of Internal Auditors (IIA), confidentiality is one of the four principles that internal auditors are expected to apply and uphold. IIA further explain that under confidentiality's principle, internal auditors respect the value and ownership of information they receive and do not disclose information without appropriate authority unless there is a legal or professional obligation to do so. IIA had also outlined the rules of conduct for confidentiality, in which internal auditors: * Shall be prudent in the use and protection of information acquired in the course of their duties. * Shall not use information for any personal gain or in any manner that would be contrary to the law or detrimental to the legitimate and ethical objectives of the organization.
Office of Internal Audit of Wayne State University further elaborates the rules of conduct that internal auditors are expected to follow in compliance with confidentiality's principle. It stated that internal auditors shall: * Not participate in any activity or relationship that may impair or be presumed to impair their unbiased assessment. This participation includes those activities or relationships that may be in conflict with the interest of the organization. * Not accept anything that may impair or be presumed to impair their professional judgment. * Disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review. * Be prudent in the use and protection of information acquired in the course of their duties. * Not use information for any personal gain or in any manner that would be contrary to the law or detrimental to the legitimate and ethical objectives of the organization.
According to Chartered Institute of Internal Auditors, this principle is pertinent to internal auditors as they have access to a wide range of information and the employing organization 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.
Numerous corporate fraud cases happen in recent century such as Enron and WorldCom have triggered not only extensive academic whistleblowing studies, but also have caused legal...