The concept of auditing in the business world is nothing new, but the notion of auditing your ethical standpoint as a company may appear as a relatively fresh and innovative concept.
As you can imagine, the auditing of a company’s ethics are many and various, ranging from societal pressures and stakeholder obligations to risk management. Occasionally, it may be a reactive response to a gross failure in ethics, whether this has been discovered internally or publicised through the media.
But what are the basics of auditing ethics, and how can you manage to improve your business’s ethical approach? Let’s find out!
Exploring the IIA Code of Ethics
When it comes to this type of auditing, there’s an IIA Code of ethics that companies and internal auditors can adhere to.
This set of criteria has a very similar objective to other codes of ethics, with this being to promote the activities carried out by an organisation across the full scope of their venture.
Typically, the four common Internal Auditor Codes of Ethics are Integrity, Objectivity, Confidentiality and Competency, each of which should be followed and implemented by a qualified internal auditor who boasts the necessary CIA accreditation. Here’s a further breakdown of each principle:
- Integrity: Let’s start with integrity, as internal auditors should perform their professional activities in accordance with all relevant laws and regulations.
- Objectivity: The auditor should also strive to add value to the company and its shareholders, by adopting a completely objective outlook that avoids any activities that are either biassed or impaired by the views of key stakeholders.
- Confidentiality: Just like an external audit, internal processes will often uncover sensitive information about the company and its stakeholders. So, it’s key that such data remains private and that the audit is bound by contracted terms of confidentiality.
- Competency: This principle refers to the skill, knowledge that an auditor requires to undertake their job role to the necessary standard, including core accounting and audit techniques.
By selecting auditors that adhere to these individual codes of conduct, you can guarantee a successful audit that really exposes just how ethical your brand identity is.
How to Improve Ethics in Your Business
In addition to carrying out the audit efficiently, there are several practical steps that you can take to improve the ethics within your business. These include:
- Developing Company Values: Let’s start with the basics; as every company should have a clearly defined set of values that underpins its ethical approach. Make no mistake; it’s values that shape a business’s ethical approach and culture, while these should also be evident through the company’s core operations. These values should also combine to create a consistent brand image and identity.
- Create Your Own Code of Ethics and Conduct: On a similar note, you should also strive to create your own formalised code of ethics and conduct for all employees to adhere to. You could start by identifying and incorporating the types of code referenced earlier in the post, creating broader guidelines for behaviour and conduct that apply to every single employee. These must be enforced too, otherwise they can become meaningless soundbites.
- Carry Out a Risk Assessment: The next step is to conduct a thorough risk assessment, pertaining to any compliance risks that exist and the conduct guidelines created. This will also ensure that your company is focused on current and relevant business risks, as a result of changes in organisations, business practises and prevailing regulations. This is an important but complex step, and one that must be followed closely if you’re to achieve the desired results.