A recent study on auditors and ethics conducted in South Africa could generate ripples all the way to South Carolina or South Philly for that matter. The survey was conducted by an organization called the Institute of Internal Auditors (IIA). The survey 
interviews what they call chief audit executives or CAE’s.
Auditors worldwide are the men and women assigned to review the books of corporations, associations and nonprofit agencies (either within or outside of government) who provide “neutral oversight.” Auditors are paid to be honest, ethical and above reproach. In this country, among other credentials, most auditors are CPA’s and must adhere to a strict code. At least in theory.
In South Africa the IIA just conducted and concluded what they call their corporate governance index. According to the organization:
“In 2017 only 53% of the 281 CAEs who responded strongly agreed that ethics is an important part of their organization’s culture. This is down from 66% in the inaugural index in 2013.”
South Africa Taking a Step Back?
Rather than discuss the statistics, if we take a step back we can conclude that in South Africa, if we were to interview 10 auditors only about 5 of them would agree that good ethics is an important part of their corporate culture. It is a frightening trend considering that in 2013, only four years ago, close to 7 of 10 auditors felt ethics was important.
Another survey recently conducted by the Anti-intimidation & Ethical Practices Forum (AEPF) found that “only 9% of professionals working in the public sector believe their leaders are ethical, though a substantial 66% of private sector professionals believe theirs are.”
It means that in South African government, most professionals (about 90% of them) believe that those who head those organizations or agencies are ethical. The numbers are quite alarming.
In the U.S., we consistently have congressional approval ratings running about 13% for both parties. It is impossible to not surmise that the U.S. and South African numbers reflecting confidence in the ethics of their agencies would be virtually identical.
This brings up another important ethical point. South African business is based on highly sophisticated, virtually identical accounting practices to those of the U.S. The names and agencies may obviously differ, but the intention of the practices of auditing and accounting are remarkably the same.
For the sake of this discussion, let us say that about half of the U.S. auditors feel that ethics is an integral part of their culture and that in U.S. government agencies, as in South Africa, only about one executive in 10 feels their agency heads are always ethical. What this could mean is a rather frightening outcome.
Who Cares about the Poor?
Starting with the second supposition, we should agree that many government agencies be they municipal, regional, state-wide or national, have been set up to meet the needs of the poor. Whether we are talking about the range of public assistance programs, veteran’s organizations, health and medical organizations or even environmental organizations, it is the poor who frequently get the short end of the stick. This is not a new revelation, we know this from reading or listening to the news every day. If there is an ethical breakdown in any aspect of meeting the needs of the “disadvantaged,” the negative impact can be huge.
Therefore, in any public organization, if unethical behavior is allowed to creep in and people take advantage through fraud, lives and quality of life for the poor will be immediately felt. Whether we are talking about the water supply in Flint, Michigan or ungodly waits for veterans to get treated at VA hospitals in the Phoenix, Arizona area we know that poor ethics can lead to catastrophe.
At the other end, are those who invest in or work for corporations. If the auditors reviewing the books of a publicly traded company, or overseeing the finances of a manufacturing plant, for example, are not ethically inclined that too will result in catastrophe. Whether bribery, bank fraud, misrepresentation of income or losses is “overlooked,” or glossed over, investors, employees and vendors could be severely impacted.
The South African survey indicated that the numbers are slipping, not holding. Why they are slipping has not been fully explored. Here in the States, we are certainly aware that personal accountability has faded as a strong sense of ethics has faded. Ethics is often viewed by auditors and governmental and for-profit workers as a distant, almost anachronistic concept. It is not. When ethics leaves, lives do not become better they often suffer.
We owe it to ourselves to be ethical. We must insure those who audit and administer are ethical. Ultimately, those most affected by a lack of ethics is each one of us.
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