Where do you, as an internal auditor, stand on ethics? This might be considered a straightforward question to answer, what with the importance of the highest conduct and standard expected of you, and ingrained within your professional studies and development.

A more challenging follow-up question would be: but what about when the pressure is on you or your team? A survey of members prior to ACCA’s 2017 annual Internal Audit conference delved into the ethical pressures faced; actions taken in those circumstances and, crucially, when and where those pressures presented themselves.

Firm truthfulness

The survey’s questions followed the themes of the conference itself. As a starting point, we should consider the words of conference speaker Derek Anderson, head of internal audit, Northern Ireland Department of Justice, who spoke of ‘not merely honesty but firm truthfulness’.

He spoke of the pressures faced in certain situations, where sugar-coated information is provided to make it more palatable. ‘Nevertheless, there are real dangers in not being truly honest.’

In terms of further setting the scene, the survey kicked off by asking 34 members about the internal audit team’s private access to the audit committee. Nearly half (13) said their head of audit has private access, while other members of the team can speak to the committee with the audit head also in attendance. Ten said the whole internal audit team could contact the audit committee. But four said not even the head of audit can meet the committee without a representative of company management present.

The vast majority (30 of 34) rated the audit committee’s understanding of the important role internal audit plays. Again, four said they weren’t up to scratch.

Ethical pressures

The central question asked of the members was whether they had left a role due to ethical pressures they had faced. Nearly half the respondents (15) said they hadn’t left a role – and had also not experienced ethical pressures.

However, eight members said they had witnessed pressures on other staff. Four stated they had felt ethical pressure upon them from within internal audit itself, while six had been pressured by operational management that made them uncomfortable professionally. One member said they’d witnessed ‘false assurance’ given to the audit committee as a result of ethical pressure. These respondents remained in their roles.

Five of the 34 members have resigned from a role due to the ethical pressure being placed upon them – of which one stated this as their reason for leaving during their departure process. One member said they’d seen two colleagues leave due to ethical pressures.

Serious issues

While the research investigates a modest number of members, it flags up a number of serious points. Though generally content with access to senior management and its appreciation of internal auditors’ importance and role, it is not all rosy. There are isolated concerns over audit committees' understanding of internal audit’s role; and a small but significant number of occasions where ethical pressures have impacted on their role and that of colleagues.

Again, a small but significant number have quit jobs or witnessed unethical behaviour due to pressures placed upon them and colleagues.

And finally, what impact has this all had on the attractiveness of internal audit as a career, or at least one in which people want to continue within?

A third (12) have served as an internal auditor for more than five years and see it as their ‘niche’. However, 11 long-serving internal auditors are unsure about whether they will remain in this role. A further five long-servers wish to change career path.

Of the remaining six respondents, four wish to continue in internal audit, while the other two raise doubts about their future.

ACCA’s new Ethics and Professional Skills module

Given these findings, the launch of ACCA’s new Ethics and Professional Skills Module on 31 October seems well timed. It is another world first for ACCA – no other professional body offers a module like it.  

It focuses on developing the complete range of ethical and professional skills employers told ACCA they need and is:

  • a module made up of seven units which ends with a self-reflection assessment, to be completed online
  • incorporates real business scenarios that a professional accountant is likely to face
  • is one of three components which make up the ACCA Qualification (the others being exams and experience)
  • costs £60 to complete – while this charge is new, the total price of the ACCA Qualification remains the same for students. ACCA members can sit the module for free.

What the module covers

Comprising seven interactive units, the module covers: 

  1. Ethics and professionalism – an introduction to the broad ethical and professional values which underpin all the other professional skills and behaviours which are explored in the module. These values provide a framework for you, the professional accountant, to guide your behaviours in demonstrating the more specific professional skills you’ll cover.
  2. Personal effectiveness – ways to maximise the quantity and quality of your work output and how you communicate and interact with others. And ensuring you make the most of the resources available to you.
  3. Innovation and scepticism – understanding how to encourage open mindedness and innovative thinking to create or suggest imaginative solutions to problems. All within the context of suitability, feasibility and acceptability – and at the same time recognising the limitations of solutions and any problems with their implementation.
  4. Commercial awareness, analysis, evaluation and problem solving – improving your ability to view situations from a commercial or business perspective, considering factors that influence the success of a business. And an understanding of the business processes, relationships, risks and costs.
  5. Leadership and team-working – getting to know more about different type of leadership approaches and traits which can be adopted or adapted at any level of the organisation. And how effective leadership involves inspiring, motivating and supporting teams to work effectively and efficiently, delivering value for their organisations.
  6. Communication skills – understanding more about how to communicate effectively with others in a business environment, including clients, customers, colleagues and external authorities. And how effective these are in different contexts and recognising the appropriate methods and skills involved in advising, supporting, motivating and influencing others.

The seventh unit is a comprehensive and interactive assessment where you are presented with a series of video clips or other media about a situation based on the learning from units 1-6. You’ll take on the role of a professional accountant and face challenges which you have to identify and explore. And then you’ll be asked to provide solutions and effective ways of delivering these to ensure the best possible outcome for the business.

It takes 20 hours to complete the module and you are awarded a certificate on completion.

As with the previous Professional Ethics Module, ACCA members are able to access the new module as part of their membership benefits with ACCA. Members can self-assess how many units CPD are appropriate for their learning, up to a maximum of seven units.

While ACCA members have already completed the ethics requirements of membership, this is a good opportunity for you to refresh your knowledge and understanding. Members do not need to complete the entire module, but must complete the first unit to be able to access the following five units and the assessment.

The module is accessible via your myACCA account.

Kevin Reed is a freelance journalist and former editor of both Accountancy Age and Financial Director