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Ethics in Internal Audit
personal investments, their objectivity may be
compromised. To maintain ethical standards, the
auditor should disclose any potential conflicts
and recuse themselves from the audit. This is
not merely a procedural formality—it is a moral
imperative that upholds the sanctity of the audit
process. Example: Consider a judge presiding over
a court case involving a close friend. To ensure
fairness, the judge would recuse themselves
S Bhaskar Deepak Kumar Garg from the case. Similarly, an auditor must avoid
CEO - Bmpro Consulting Chief Internal Auditor auditing areas where they have personal interests
Services Tata Teleservices Ltd. to maintain objectivity.
sbhaskar43@gmail.com erdeepleo@gmail.com
Confidentiality
Confidentiality is another critical aspect of ethics
in internal audit. Auditors often have access to
In the realm of internal auditing, ethics serve sensitive information, and it is their ethical duty
as the cornerstone upon which the integrity to protect this information from unauthorized
and credibility of the audit process are built. The disclosure. Consider the example of a doctor who
relationship between ethics and internal audit must keep patient records confidential. Similarly, an
is akin to the bond between a compass and a internal auditor must safeguard the confidentiality
navigator; without ethical principles guiding the of the data they review, ensuring that it is only
auditor’s actions, the audit process would lose its shared with authorized individuals. Breaching
direction and purpose. this trust can have far-reaching consequences,
both legally and reputationally. Example: Imagine
To understand the signific ance of ethics in internal a lawyer who is privy to their client’s confidential
audit, consider the daily life of an individual. information. The lawyer is ethically bound to keep
Imagine a scenario where a person discovers a this information private. Similarly, an auditor
wallet on the street. The ethical decision would must protect the confidentiality of the information
be to return the wallet to its rightful owner, they access during an audit.
demonstrating honesty and integrity. Similarly, an
internal auditor must adhere to ethical standards, Professional Competence
ensuring that their findings and recommendations
are truthful and unbiased. Professional competence is essential for auditors
to perform their duties effectively. This principle
Ethics in internal audit encompass various requires auditors to possess the necessary skills
principles, including objectivity, confidentiality, and knowledge to conduct audits accurately.
and professional competence. Imagine a chef who must have the expertise to
prepare a gourmet meal. Likewise, an internal
Objectivity auditor must continuously update their knowledge
and skills to stay abreast of industry standards and
Objectivity requires auditors to remain impartial best practices. Ethical auditors do not rest on their
and avoid conflicts of interest. For instance, laurels; they pursue lifelong learning to ensure
if an auditor is tasked with reviewing the their judgments are sound and informed. Example:
financial records of a company where they have Consider a pilot who must undergo regular
15 INTERNAL AUDIT TODAY
