ETHICS

According to Luanne Kelchner(2017) ‘’ethics are the principles and values an individual uses to govern its activities, in an organization a code of ethics is a set of principles that guide the organization in its programs , policies and decision for the business’’. It went further by breaking ethics into Leadership ethics and Employee’s ethics.

Leadership Ethics: This kind of ethics have great effect on the Morals and loyalty of workers, leaders in the organization uses this to determine discipline procedures and behaviours expected of every personnel in the organization. Ethical leadership enhance the reputation of the company in the business market as a whole and this also helps the workers in the organization to work in line. Improvement in the organizations business can be visible if there is a rooted leadership ethics.

Employee’s Ethics: This ensures that an organization’s employee carry out their duties with complete honesty and integrity. Organizations have employee policies and rules and this must be strictly adhere to especially by employee that uses the ethics as a guide.

Business objective are achieved easily when there is a perceived effective corporate culture in leadership which also cascade down to the employees.

The institute of internal audit (IIA) states ‘’ the purpose of the institute code of Ethics is to promote an ethical culture in the profession of the internal auditor’’ which as a whole influences the organization where the auditor is engaged. As internal auditors are expected to follow the code of ethics principles its must rob off on the management of the organization.

An organization that carries out good business following ethical practices has the below to benefit.

·        Increased Customer Loyalty: An organization that is into good ethical practice will give customers some level of confidence in patronising their product and give them opportunities to have a repeat business with them.

·        High level of employee retention: when there is a good ethical procedure in place employees of an organization will be retained which help the organization to have a pool of experience personnel which is very beneficial to the organization. I t saves the organization the recruiting cost.

·        Good public Image: when a company exhibit an high level of ethical practices it will enjoy a positive and good public image which will in turn increase customer loyalty which will leaded to high productivity, increase profit etc.

·        Little or No Legal Issues: When work is done as expected, all activities carried out with high ethical standards there will be little or no legal issues to attend to.

Corporate Social responsibility (CSR) ‘’ is the corporations initiative to assess and take responsibility for the company’s effect on environmental and social wellbeign ,it could also mean incurring short term cost that do not provide an immediate financial benefit to the company but instead promote positive social and environmental change.’’ (Investopedia)

The CSR is a way a company add value to its immediate environment majorly. The organization benefit in doing CSR by the following according to Double the Nation (2017)

·        Improve Public Image: When a company is seen responsible especially in its environments its public image is improved , Support for not for profit organization and various donations help alot.

·        Increase Media Coverage: How much an organization affect its environment positively determine how much media recognition and coverage it has which is positive for the business.

·        Attracts and Retain Investors: Companies that are involved in CSR demonstrate to investors that they are not just all out for profit but to make positive impact which could be an encouragement for investors knowing fully well that their funds are in safe hands.

According to Compliance Alliance(2017) There are two important aspect to independence and they are :

INDEPENDENCE IN FACT (Real Independence)

INDEPENDENCE IN APPERANCE ( Perceived Independence)

Both are important in achieving the company’s goal Real independence is the actual independence of the auditor as expected i.e independence of mind. Independent in appearance as the name implies the auditor is just seen in person and his decision is bias.

An Article In the Black (2017) gives threat to auditors independence and how the business.

Self Review Threat: This occur when its the same auditor that prepares the account which he is to audit internally. This will not show the true picture of things in the organization.

Advising Threat: This threat occurs when an auditor also provides financial advice to management.

Relationship Threat: The internal auditor knowing any of the top management on a personal note will affect its decisions.

Stakeholders tends to distrust an organization that exhibits lack of ethical standards.

REFERENCE:

The Saylor Foundation (2013).Ethics and Business Success[Online] Available From: https://www.saylor.org/site/wp-content/uploads/2013/09/Saylor.orgs-Ethics-and-Business-Success.pdf (Accessed 21/1/2017)

Luanne Kelchner (2017). The Importance of Ethics in Organisation.[Online] Available From: https://smallbusiness.chron.com/importance-ethics-organizations-20925.html (Accessed 21/1/2017)

Management Study Guide (2017).Importance of Ethics.[Online] Available From: https://www.managementstudyguide.com/importance-of-ethics.htm (Accessed 21/1/2017)

Investopedia (2017).Corporate social Responsibility.[Online] Available From: https://www.investopedia.com/terms/c/corp-social-responsibility.asp (Accessed 21/1/2017)

Double the Donation (2017).Why Corporate Social Responsibility is Important.[Online] Available From: https://doublethedonation.com/why-corporate-social-responsibility-is-important/#corporations (Accessed 21/1/2017)

Institute of Internal Auditors (2017).Code of Ethics.[Online] Available From: https://na.theiia.org/standards-guidance/mandatory-guidance/Pages/Code-of-Ethics.aspx (Accessed 21/1/2017)

Compliance Alliance (2017).Audit Independence.[Online]Available From: https://www.compliancealliance.com/our-services/audit-independence (Accessed 21/1/2017)

The Institute of Internal Auditors Research Foundation(2016).Independence and Objectivity[Online] Available From: https://na.theiia.org/iiarf/Public%20Documents/Chapter%207%20Independence%20and%20Objectivity%20A%20Framework%20for%20Research%20Opportunities%20in%20Internal%20Auditing.pdf (Accessed 21/1/2017)