Auditors, ethical judgement and whistleblowing

fraud, bribery and corruption

AUDITORS, ETHICAL JUDGEMENT AND WHISTLEBLOWING

Itsaso Barrainkua and Marcelo Espinosa-Pike[1] examined widespread claims that professionalism among auditors has decreased. The assumption was due to a shift in paradigms and particularly because the global audit market is mostly controlled by profit-seeking individuals, groups and organizations. The book focused on auditors’ commitment to professional ethics, independent enforcement and protection of public interest. Itsaso and Marcelo analysed the understanding of professional values among auditors at different stages of their career. The scholars also compared performance of research students and experienced auditors on independent enforcement to ascertain auditors’ ethical judgement and their commitment to public interest.

Findings from the study show that students were more committed to independent enforcement and protection of public interest. But auditors tend to lower professional values as they climb the career ladder. In addition, results indicate that auditors possess higher ethical judgement than students. These two values—independent enforcement and public interest—however, precede ethical judgement.

Itsaso and Marcelo suggested improvement of ethical decision-making in auditing and use of their recommendations in the education, hiring, and professional development of auditors.

  1. WHISTLEBLOWING AND THE SAFETY OF PATIENTS DURING COVID-19

The increased number of retaliatory attacks on whistleblowers during Coronavirus pandemic highlights the urgent need to re-orientate employees on their rights as stipulated in the Act. Moreover, ignorance on Dodd-Frank provisions among employees, and the financial cost to governments and tax-payers, calls for immediate strengthening of whistleblower protection structures. Therefore, global health workers—including employees in all sectors of global economies—should be able to speak out during COVID-19 for the purpose of drawing public attention to inadequate personal protection equipment (PPE) supplies and unsafe/inconducive working conditions without being subjected to intimidation, attack, censorship or arrest[2]. However, governmental systems in both US and UK, including other countries afflicted by the pandemic, have failed to provide health workers with the resources and protection they need to perform optimally. Although whistleblowing for inadequate supplies of personal protective equipment (PPE) represents only one of numerous situations in which clinicians may opt to raise concerns, there is still lack of a streamlined, secure and robust communication channel through which employees in the healthcare sector can ensure patient safety. Further, systemic failures which expose employees to a bullying culture is a huge challenge that regulatory bodies are confronting with provision for anonymous reporting in order to protect informants from dismissal, harassment, and victimisation[3]. Therefore, any whistleblower who believes he/she has been unfairly treated for making a disclosure may decide to take their case to an Employment Appeal Tribunal. The process usually involves at attempt by the Advisory, Conciliation and Arbitration Service (ACAS) to reconcile parties to the dispute.

COVID-19 has therefore facilitated rapid redesign and redeployment of health workers, equipment, and services. Scientists and researchers around the world have also—through high professional standards—created clinical environments which guarantee quality care and patient safety as well as preserve human dignity[4]. Yet, the role of whistleblowers in maintaining ethical and legal standards remains unarguably crucial.

  • CONCLUSION

This academic research will add more to the body of knowledge by investigating the link between whistleblowing intentions and time of making a disclosure. Further, to understand the correlation between fraud and employees’ knowledge of Dodd-Frank, the researcher will explore relevant study materials on external and internal whistleblowing from the inception of Dodd-Frank in an environment where financial rewards increase as more fraud cases are reported. The study will also examine the gap between perceived knowledge of the Act and anti-regulatory behaviour. Results of the study will help organizations and SEC to create more effective policies that encourage, reward and protect whistleblowers. Basically, protection of whistleblowers is of great benefit to modern-day societies, thus, governments and organizations have the responsibility to develop tools that encourage whistleblowing[5].

But despite the effectiveness of Dodd-Frank and Sarbanes Oxley Act (SOX) in the U.S., whistleblowing in Britain’s NHS[6] and all sectors is minimal because the UK government rejects the idea of monetary rewards—with emphasis on the moral aspect of whistleblowing. Although the European Union (EU) Directive does not prevent EU member states from offering financial compensations, it made no provision/reference to the issue of benefits. This highlights the need for countries to adapt customized solutions capable of solving their unique socio-economic problems instead of borrowing ineffective and time-wasting tools for controlling fraud.

References

Amon J.J. Human rights protections are needed alongside PPE for health-care workers responding to COVID-19. The Lancet Global Health. 2020 doi: 10.1016/S2214-109X(20)30252-7

Itsaso B. & Marcelo E “The influence of auditors’ professionalism on ethical judgement: Differences among practitioners and postgraduate students” 2018 Revista de Contabilidad (21) (2) 176-187

Kalil A.C. Treating COVID-19—Off-Label Drug Use, Compassionate Use, and Randomized Clinical Trials During Pandemics. JAMA. 2020;323(19):1897–1898

Mintz S “Whistleblowing Considerations for External Auditors under Dodd-Frank: A Blueprint for Future Research” 2015 Journal of Professional Responsibility and Ethics in Accounting (19) 99-128

Moore M A, Huxford J and Bethmann J B “National Security Whistleblowers and the Journalists Who Tell Their Stories: A Dangerous Policy Dance of Truth-finding, Truth-telling, and Consequence, Corruption, Accountability and Discretion 2017 Public Policy and Governance (29) 227-246

Scheetz A M and Wall J “Making Crime Pay: Timing of External Whistleblowing” 2019 Baker C R (eds) Research on Professional Responsibility and Ethics in Accounting (22) 1-30

Suh, I., Sweeney, J., Linke, K., and Wall, J. (2018). Boiling the Frog Slowly: The Immersion of C-Suite Financial Executives into Fraud.  Journal of Business Ethics. Published online 2018. 1-29. Print: 2020, 162: 645-673

The Lancet Blowing the whistle on intimidation of NHS whistleblowers. The Lancet. 2011;378(9790):458

Wall, J. and Gissel, J. (2019). Board of Directors’ Sanction Judgments: The Effect of Situational Factors. Journal of Managerial Issues. 31(1): 85-112.

Case Laws

Asda Stores Ltd v Brierley and others [2019] IRLR 335 CA, a case filed by more than 37,000 people. It is one of the largest equal pay case in the private sector. Court of Appeal ruled that workers in Asda supermarkets—who were mainly female—are entitled to compare their pay with what depot workers (who are mainly male) received, because both genders have common terms in their employment offer letters.

Supreme Court hearing of the appeal filed by ASDA against the Court of Appeal decision was scheduled on 13 and 14 July 2020.

Aslam and others v Uber BV and others [2017] IRLR 4 ET

This high-profile case between Uber drivers (regarded by the company as self-employed) was filed to prove that drivers are, in fact, employed workers who deserve full entitlements such national minimum wage and paid annual leave.


[1] Itsaso B. & Marcelo E. “The influence of auditors’ professionalism on ethical judgement: Differences among practitioners and postgraduate students” 2018 Revista de Contabilidad (21) (2) 176-187

[2] Amon J.J. Human rights protections are needed alongside PPE for health-care workers responding to COVID-19. The Lancet Global Health. 2020 doi: 10.1016/S2214-109X(20)30252-7

[3] Aslam and others v Uber BV and others [2017] IRLR 4 ET

[4] Kalil A.C. Treating COVID-19—Off-Label Drug Use, Compassionate Use, and Randomized Clinical Trials During Pandemics. JAMA. 2020;323(19):1897–1898

[5] Asda Stores Ltd v Brierley and others [2019] IRLR 335 CA

[6] The Lancet Blowing the whistle on intimidation of NHS whistleblowers. The Lancet. 2011;378(9790):458