Hand in Assignment

Please refer to the IIA's Code of Ethics. Identify three (3) specific Rules of Conduct relevant to this case. Using the Rules of Conduct you identify as the context, discuss the ethical issues raised in the case (6 marks). 1. Integrity 1.4 a. This rule in the IIA's Code of Ethics suggests that all professionals in the business maintain professional and lawful relationships and respect and contribute to ethical objectives in the Organization. b. In the case we see the problem of Integrity rise between the dispute over the product of "X5" and bonuses. Bartosz an internal auditor is concerned about the evaluation of this product and wants to write off all obsolete inventory. However, Integrity of financial reporting falls when the one of the division managers, Shahir, insists on delaying the write off action to receive a bonus. Which is an ethical concern on Integrity. 2. Objectivity 2.1 a. This rule in the IIA's Code of Ethics suggests that all professionals maintain distance from personal relations and claim an unbiased approach on decisions and actions. b. In the case we see the problem of objectivity arise as a concern in decision making between the influence by two parties. Shahir, division manager admin assistant and Adam, the division manager. Both parties are attempting to influence Bartosz decision on whether he should delay and not record specific write offs in the reports and showing him the potential consequences of this type of reporting. Which is complicating the decision making for Bartosz. As well as, Joanne, who Bartosz respects, also has a way to influence the decision making. 3. Confidentiality 3.1 a. This rule in the IIA's Code of Ethics suggests that all professionals are discreet about sensitive information and are not discussing or leaving notes of information behind for others to capitalize upon for personal gain. b. In the case we see the problem of Confidentiality arise when Bartosz is discussing to Joanne, who is the director of internal audit. The main concern is that the sensitive information about the dispute between specific write offs in the financial reporting should be held discreetly within the organization and must be cautious around Joanne when he
is discussing about the issues, as it can lead to bias or problematic decision making for Joanne and Bartosz. Please discuss the ethical dilemma Bartosz faces that might have been avoided. In other words, discuss five (5) specific things TIE-DYE's management and/or the internal audit function might have done to reduce the risk of such a situation arising (10 marks). 1. TIE-DYE's management could have taken steps such as training, retraining and regular feedback to employees on the bases of informing employees about company standards, procedures, expectations, and ethical policies. These trainings and feedbacks would have helped minimize or mitigate the ethical dispute for Bartosz, as it would allow them to understand expectations. 2. Another step that TIE-DYE's management and the Internal Audit Function could have taken was to clarify and remain independent from each other. As in the case we see the involvement and discussion of Joanne and Bartosz, which should have been independent and separate. They should make sure that both parties are always independent to avoid confusion and bias decision making. 3. TIE-DYE's management can also have clear policies written in their policy manual as it would allow decision makers to make decisions according to firm objectivities. Such as in the case, when Shahir and Bartosz found evidence to support each of their own claims regarding the reporting of write offs. This misunderstanding of contradiction of policies is misleading and can create a risk as such in the case. The management may need to review their policies and make adequate changes accordingly. 4. Another step the TIE-DYE's management could do is make a concern deposit box or something like a help and report desk, where employees can anonymously report incidents in the workplace, such as negative unethical conduct being in the workplace for bonuses. This can reduce the risk of such problems as it will allow use other member inputs towards solving the issue on hand. 5. Lastly, the TIE-DYE's management could have taken steps like step 2 where they could have clearly delegated and clearly interpreted the roles of each member and their responsibility within the organization. And that each member is responsible to work ethically within his roles. For example, how Shahir role as a division manager, was not fully followed as Bartosz had to
interfere and solve all his issues as he was not performing up to standards. Further leading Bartosz to follow a similar path where he got confused of his own responsibilities and role. 3. indicate what you would do if you found yourself in Bartosz's position. Relate your response to the IIA standards. (4 marks). The IIA standards recognize that professional practices are conducted in a diverse legal and cultural environment which involve organizations, structures, and people behaviors within and outside the organization. These standards are meant to guide and redirect professional practices to meet the standards for organizations, by evaluating performance and operations. Based on the IIA standards the decisions that I would be making would follow along these standards to meet organizational goals and standards. I would be doing this by first understand the standards for the organization, in this case, by making sure I understand what the organization expects me to do and what the code of ethics, IPPF, and other standards guide me to make decisions for the firm. Moving onwards, I would keep my independence in the firm and avoid any bias decision making or influences. Which then would help me to make a clear decision which in this case would be to report the write offs in reports as that is what the organization expects from its employees from the obsolete inventory items. This means that I would follow the rules and standards according to what the organization wants and avoid any certain pressure or influence. In the end, even if I were to choose the other side, the truth of the problem will eventually come out. Which may cause problems even more than the ones currently.
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