Ethical Issues in Auditing and Managerial Accounting

Using whistleblowers to expose unlawful activity in corporations is an essential part of the process. “A whistleblower is a person who informs the public or someone in authority about suspected dishonest or unlawful acts (misconduct) taking place inside a government agency, a public or private organization, or a firm,” according to the American Bar Association (Susmanschi, 2012). These people assist in bringing problems to the notice of others who can intervene and rectify the situation if necessary. No one likes to work in an environment where the safety of their coworkers is jeopardized if employees are being pressured to overlook when others meddle with the financial statements. As long as the whistleblower is confident that their intentions are sound, they should not hesitate to communicate such information and take pride in the fact that they are contributing to creating a safer working environment for their colleagues. Whistleblowing may be used to draw attention to problems that need to be addressed inside a firm by alerting management to them. “It will be recognized that whistleblowers are required to create a society that is open and honest” (Francis et al., 2015). Whistle bowling is a commodity required in today’s society, much like checks and balances, as a safeguard against those who misuse their positions of authority and influence.

Whistleblowing is a vital part of corporate governance, with internal whistleblowing becoming ideal since suspected wrongdoing wouldn’t become public awareness and, as a result, may not influence public discourse. Whistleblowers are not universally admired. Whistleblowers have to choose between their loyalty to the employer or the topic of disclosure and their moral commitment to the law, society, and views and values (Brown & Edward Elgar Publishing, 2014). Companies despise them because they force the corporation to attempt to safeguard and defend its interests. Researchers Rothschild and Miethe have shown that although some people perceive whistleblowers as disloyal, others see them as courageous defenders of essential principles than corporate allegiance (1999). “Some people regard whistleblowers as traitorous violators of organizational loyalty norms,” the authors write. Conflict arises from how a whistleblower is perceived: whether they are seen as someone revealing information of misbehavior for the benefit of others or as someone who is betraying their employer. Some of those being investigated for misconduct does not seem fond of whistleblowers, yet outside groups value their honesty. Suppose whistleblowing is regarded as a fair and effective weapon for changing individual and collective behavior. In that case, the alert will be directed towards safeguarding the business and instilling a sense of self-regulation, and internal auditors will be assigned a unique purpose (Susmanschi, 2012). Whistleblowing is an essential aspect of maintaining a sense of equilibrium in organizations. Ultimately, people must be true to themselves; nevertheless, not everyone can live with themselves if they sit back and watch while something unpleasant is taking place in their lives.

Whistleblowers play an essential role in ensuring that ethical conduct is maintained in a company. Deontology argues that individuals should always obey the principles of ethics, no matter what the circumstances are. Exposing hazards that might endanger the safety of employees, as well as falsified financial records, is the morally right thing to do. “We may regard whistleblowing as an ethical behavior when it is obvious that certain actions have a major detrimental impact on the firm, the public, or other individuals in a serious way, hurting their health, their lives, or other aspects of their existence” (Susmanschi, 2012). Inaction on these matters would violate the Deontological belief system, as would failure to disclose evidence.

Whistleblowing is vital from a Christian perspective and also from a moral and ethical one. True to his nature, Jesus called out false instructors and people’s erroneous religious beliefs. By appointing his followers to “preach the truth,” Jesus established a group of “whistleblowers” who would be willing to sacrifice their lives by participating in his pain, death, and resurrection. The veracity of Jesus’ assertion was not readily recognized by both the villagers who questioned his claim and the religious authorities (Apaza & Chang, 2011). Paul was a whistleblower, calling attention to individuals living in opposition to God’s Word, against the Bible’s Teachings, and even against God Himself. When it came to being a faithful disciple of Jesus, Paul was an unyielding whistleblower who has never wavered in his quest for the gospel’s truth.

Another instance may be found in the book of 2 Kings. King Joash was assassinated by his attendants in 2 Chronicles 12:19-20. In 14:5-7, his son, King Amaziah, orders the execution of the murderers who murdered his father. Blowing the whistle at your workplace, government institution, or even religion, if it is suitable, is an excellent idea (Boot, 2018). However, don’t expect everyone to express their thanks right away.

References

Apaza, C. R., & Chang, Y. (2011). What Makes Whistleblowing Effective. Public Integrity, 13(2), 113–130. https://doi.org/10.2753/pin1099-9922130202

Boot, E. R. (2018). No Right to Classified Public Whistleblowing. Ratio Juris, 31(1), 70–85. https://doi.org/10.1111/raju.12192

Brown, A. J., & Edward Elgar Publishing. (2014). International handbook on whistleblowing research. Edward Elgar Pub. Ltd.

Francis, R. D., Armstrong, A. F., & Foxley, I. (2015). Whistleblowing: a three-part view. Journal of Financial Crime, 22(2), 208–218. https://doi.org/10.1108/jfc-03-2014-0011

Susmanschi, G. (2012). Internal Audit And Whistle-Blowing. Economics, Management, and Financial Markets, 7(4), 415-421.