Violation of ethics standards can break the bond of trust that is essential to a profitable relationship between a small business and its customers. Maintaining that bond of trust is important to an organization's well-being, so it is essential for management to develop protocols for measuring and quantifying compliance with ethical standards. The most effective tool that organizations of all sizes have for accomplishing this goal is the ethics audit.
Ethical behavior audit teams must be free from interference or impairment from any department or management function. Conflicts of interest are avoided by ensuring individual auditors are not assigned to evaluate the department the auditor reports to. Many organizations have found that cross-functional teams made up of members from all across the company are the best way to ensure the independence and objectivity of the audit process. The Sarbanes-Oxley Act of 2002 prohibits auditors from performing management functions or auditing their own work.
After the independence of the audit team is established, the next step is to ensure the organization being audited has established a written code of conduct. The audit will evaluate whether or not the code addresses all of the business practices of the organization and the standards of behavior employees are expected to follow. The auditors must check to see if the code has been communicated to everyone within the organization, and if there is a protocol for employees to formally acknowledge they have received and understood the requirements outlined in the code.
An ethics audit also determines if the organization's leadership has made a commitment to enforcing ethical behavior from the top of the company down to the lowest levels of the organization. The audit determines if leadership has accepted responsibility for the creation of a culture that insists on ethical behavior from every employee. Leadership's commitment to ethics can be quantified by surveys from customers and other stakeholders. An ethical company culture creates value when customers perceive they will be treated with dignity and integrity.
Auditors should never represent themselves as having expertise they do not possess. Auditors must be selected on the basis of proven technical expertise and recognized certifications. Auditors must be fully qualified in all relevant industry standards and governmental regulatory requirements. Professional recognition and value of an audit is directly related to the competence of the auditors. Under the Sarbanes-Oxley act of 2002, using unqualified auditors may subject both the auditor and the organization being audited to legal penalties.
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