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Ethics in Business: The Role of Internal
Audit in Upholding Integrity
internal audit’s role has evolved. Auditors are
now expected to assess ethical culture, detect
misconduct, and ensure governance frameworks
are robust enough to handle ethical dilemmas
effectively.
How Internal Audit Strengthens Ethics in
an Organization:
• Assessing the Ethical Culture: Internal auditors
Sai Kishore K go beyond policy reviews and conduct culture
Partner, Internal Audits & Risk advisory, audits—engaging with employees, conducting
Vasan & Sampath LLP anonymous surveys, and evaluating how
saikishore.k@vscaglobal.in ethical principles translate into daily business
practices. Misalignment between stated ethical
values and actual behaviours can signal deeper
cultural issues that require attention.
In today’s complex business environment, ethics
is no longer just a corporate buzzword—it is a • Reviewing Governance and Ethical
foundational pillar that defines an organization’s Frameworks: Internal audit evaluates the
culture, credibility, and long-term success. Ethical effectiveness of the organization’s code of
lapses have repeatedly shown their power to erode conduct, whistleblower mechanisms, and anti-
trust, damage reputations, and lead to financial corruption policies to ensure they are well-
losses. This is why many forward-thinking structured, accessible, and actively enforced.
businesses and their leadership teams are now
embedding ethics into their leadership approach, • Testing Controls for Fraud and Misconduct:
ensuring it becomes a key driver of decision- Ethical breaches often stem from control
making, governance, and stakeholder engagement. weaknesses. Internal auditors conduct fraud risk
assessments, review transactions for conflict of
However, setting an ethical tone at the top is not interest scenarios, and analyse various areas, say
enough. Organizations must actively monitor, for eg procurement, expense reimbursements,
assess, and strengthen their ethical frameworks. and high-risk payments for potential red flags.
This is where internal audit plays a crucial role—
not just as a compliance enforcer, but as a strategic • Whistleblower Program Effectiveness: Having
partner in building and maintaining an ethical a whistleblower program is one thing, ensuring
organization. it works without fear of retaliation is another.
Internal audit tests whistleblower hotline
The Expanding Role of Internal Audit in effectiveness, investigates trends in reported
Ethics Oversight cases, and evaluates if management is taking
ethical concerns seriously.
Traditionally, internal audit has been viewed
through the lens of financial accuracy, compliance, • Embedding Ethics into Enterprise Risk
and operational efficiency. But in an era where Management (ERM): Ethical risks must be
ethical risks are as significant as financial risks, embedded within the organization’s overall
45 INTERNAL AUDIT TODAY
