Domain II: Ethics & Professionalism, Principle 1 Demonstrate Integrity Flashcards
Standard 1.1 Honesty & Professional Courage, Standard 1.2 Organization's Ethical Expectations, Standard 1.3 Legal & Ethical Behaviour
Introduction
- Updated Standards: New principles replace the old Code of Ethics for internal auditors.
- Trust & Ethics: Compliance fosters trust and an ethical culture.
- Mandatory: All auditors must follow these standards, regardless of other codes.
- Chief Audit Executive Role: Supports compliance through training and remains accountable for ethics.
Principle 1 Demonstrate Integrity
Internal auditors demonstrate integrity in their work and behavior.
Broad Description of Principle 1
- Definition: Integrity means being honest and sticking to ethical values, even under pressure.
- Auditors’ Role: Internal auditors must tell the truth and make the right choices, even when difficult.
- Importance: Integrity fosters trust and respect, which are essential for professionalism.
Standard 1.1 Honesty & Professional Courage
Requirements
Mandatory practices for IA
- Integrity: Work honestly and demonstrate professional courage.
- Communication: Be truthful, clear, and respectful, even when disagreeing.
- Transparency: Avoid misleading statements and disclose all relevant information.
- Courage: Act appropriately in difficult situations and communicate truthfully.
- Support: CAE must foster an environment that encourages sharing honest results, whether positive or negative
Standard 1.1 Honesty & Professional Courage
Considerations for Implementation
Common practices to consider when applying the requirements.
- Education: Auditors should take ethics courses and receive workplace training to practice honesty and courage.
- Handling challenges: Discuss issues with a supervisor when facing ethical dilemmas.
- Support: Chief audit executive should offer training, ethical discussions, and strong supervision.
- Guidance: Supervisors provide help during work reviews on integrity issues.
- Feedback: Collect feedback on auditors’ honesty and courage from stakeholders.
Standard 1.1 Honesty & Professional Courage
Examples of Evidence of Conformance
Proof that the requirements are being followed.
- Training plan: Includes ethics education.
- Attendance records: Proof of auditors attending ethics training.
- Performance evaluations: Assessments include honesty and professional courage.
- Stakeholder feedback: Input on auditors’ honesty and courage
Standard 1.2 Organization’s Ethical Expectations
Requirements
Mandatory practices for IA
- Understand Expectations: Know and respect the organization’s ethical standards.
- Identify Misconduct: Recognize behaviors that violate these standards.
- Promote Ethics: Foster an ethics-based culture in the organization.
- Report Concerns: Report any unethical behavior as per established policies
Standard 1.2 Organization’s Ethical Expectations
Considerations for Implementation
Common practices to consider when applying the requirements.
- Document Ethics: Create a code of ethics and conduct.
- Promote Integrity: Foster an ethical culture within the organization.
- Assess Risks: Evaluate ethics-related risks in the audit plan.
- Set Reporting Protocols: Define procedures for addressing ethical issues.
- Align with Leadership: Ensure the methodology aligns with board expectations.
- Include Ethics in Audits: Incorporate ethical considerations in audits.
- Report Violations: Inform the board about ethical breaches.
- Validate Actions: Confirm appropriate responses to ethical concerns.
Standard 1.2 Organization’s Ethical Expectations
Examples of Evidence of Conformance
Proof that the requirements are being followed.
- Training Records: Attendance in ethics workshops.
- Commitment Forms: Signed acknowledgments of ethics policies.
- Audit Plans: Documentation of ethics considerations.
- Communication Records: Reports of ethical issues to management.
Standard 1.3 Legal and Ethical Behavior
Requirements
Mandatory practices for IA
- No Illegal Activities: Internal auditors must avoid illegal or harmful actions.
- Compliance: They must adhere to relevant laws and regulations.
- Report Violations: Report any legal violations to the appropriate authorities.
Standard 1.3 Legal and Ethical Behavior
Considerations for Implementation
Common practices to consider when applying the requirements.
- Methodology: The chief audit executive (CAE) should develop clear guidelines for addressing legal or regulatory violations and ensure proper actions are taken.
- Supervision: Ensure internal auditors are supervised and comply with Global Internal Audit Standards.
Discreditable Behaviors
1. Harassment: Engaging in bullying or discrimination.
2. Dishonesty: Misrepresenting qualifications or lying.
3. False Reporting: Issuing misleading reports or omitting findings.
4. Ignoring Violations: Overlooking illegal activities.
5. Confidentiality Breach: Disclosing information without authorization.
6. Compromised Objectivity: Not disclosing conflicts of interest.
7. Misrepresenting Compliance: Claiming adherence to standards without evidence.
8. Avoiding Accountability: Failing to accept responsibility for mistakes.
Standard 1.3 Legal and Ethical Behavior
Examples of Evidence of Conformance
Proof that the requirements are being followed.
- Training Records: Proof of ethics and law training.
- Acknowledgments: Signed commitments to legal standards.
- Methodology Documentation: Procedures for handling violations.
- Communication Records: Notes on discussions of unethical actions.
- Workpaper Review: Confirmation of review.
- Engagement Communication: Final audit reports
