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Business Ethical Dilemma

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TONE at the
Issue 55 / April 2012

TOP

Exclusively for Senior Management, Boards of Directors, and Audit Committees

Ethical Dilemmas
What rationalization does a company make to justify a corporate culture where ethics are ignored? In recent years, greed, fraud, and a lack of ethical conduct have led to the collapse of many organizations. A variety of internal and external pressures can lead companies down the wrong path. And once the first misstep is taken, it’s a slippery slope to hurting stakeholders, the community, and your reputation. This turmoil and damage could have been avoided if organizations had chosen to maintain an ethical corporate environment, exercising integrity-rich behavior and ensuring the tone at the top was above reproach. This issue of Tone at the Top presents suggestions for creating and promoting an ethical corporate climate and the role internal auditors can play in helping ensure the environment supports ethical decisions and behavior.

Code of Ethics
It’s important to note that internal auditors adhere to their own Code of Ethics, which is included in The IIA’s International Professional Practices Framework (IPPF). The Code of Ethics mandates that internal auditors behave and practice with: n Integrity. n Objectivity. n Confidentiality. n Competency.

It also delineates rules of conduct under each of the principles. A code of ethics is necessary and appropriate for the profession of internal auditing, founded as it is on the trust placed in its objective assurance about governance, risk management, and control.

Ethical Values
According to the Institute for Global Ethics (IGE), five ethical values exist in any human culture, regardless of age, religious affiliation, gender, or nationality. Those values — which play a role in all dealings, transactions, relationships, and situations — comprise being: Honest and truthful.

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