IIA SA CEO Claudelle von Eck says the number of internal auditors reporting intimidation has significantly increased.
President Cyril Ramaphosa’s inauguration on Saturday marks the next phase for South Africa as a nation, which many hope will bring about social and economic prosperity for all. However, the Institute of Internal Auditors South Africa (IIA SA) has called for Ramaphosa’s new government to champion the cause of good governnance in state entities, in the wake of troubling results of a new survey conducted by the organisation.
The IIA SA study, conducted among a sample of its 8,000 members, found that at least 40 percent of those working in local municipalities fear for their lives when blowing the whistle on wrongdoing.
“This is compared to 37.5 percent of those in national government and 25 percent in state-owned enterprises,” the report states.
The survey was conducted locally among internal auditors from both the public and private sectors, including chief audit executives, in a period during which judicial and presidential commissions of inquiry and numerous media exposés have unearthed extensive corruption and flaunting of corporate governance regulations in both sectors.
IIA SA CEO Claudelle von Eck says that the institute has in recent times received a number of reports from internal auditors claiming they were victimised, intimidated and coerced into sweeping findings under the carpet.
“Many said that they live in fear of losing their jobs while others said their lives were threatened. The number of IIA SA members complaining of their plight has significantly increased and, as a result, the Institute commissioned the research to ascertain how widespread the challenges are.”
Claudelle said that with the survey the IIA SA was able to drill a little deeper into internal audit specific concerns. “What is clearly coming through is that there is a culture of fear in many organisations and that, especially where findings are raised that implicate leaders in the organisation, internal audit is not protected,” she said. “Audit committees and oversight bodies need to do a lot of introspection around their effectiveness in supporting and protecting internal audit.”
She continues, saying that:
“Internal audit should be embraced as a critical partner to business rather than as a watchdog whose objective it is to catch management on the wrong foot. Internal audit reports must be seen as an opportunity to self-correct, improve and safeguard value. The broader auditing profession has been under a negative spotlight, but it is important that we recognise the meaningful role it can play in rebuilding SA.”
Claudelle says it is clear from the overall results that the biggest concern lies in the area of executive management not giving internal audit appropriate support and that internal audit is often not protected when findings are raised that implicate executive management. “Almost a third of the respondents indicate discomfort in this area,” she says referring to the response of a significant 18 percent who indicate that they fear for their lives and that of their families if they were to report questionable activities.
“Internal audit plays a significant role in governance and thus directly or indirectly affect all of our lives,” Claudelle says. “Thus, we encourage our members to stand up and execute their mandate in the interest of the greater good. Ethical courage is key.”
She says that it is going to take the collective effort of all charged with governance to ensure the reboot of the economy. Internal audit plays a key role in the value creation process. And, she believes, the profession, like the country, must visibly and continually reaffirm its values, ethos and integrity in contributing to the socio-economic fabric of the country.
She concludes that:
“To this end we want to wish President Cyril Ramaphosa, his Cabinet as well as the legislative arms of government well over the next five years and encourage them to take a strong stance as champions of good governance and walk that talk.”