The pharmaceutical retail company
Sue, the new internal auditor at Pharma Co. , has already discovered early on a major inventory discrepancy and selling of expired products among the company’s outlets. Even at this early stage in her work with the pharmaceutical retail company, the new auditor has already uncovered a major fraud. This only implies that there could be many more fraudulent activities that the company’s internal auditors are hiding. Being an auditor, Sue’s primary consideration is how to uphold the ethical standards of her profession. She must have integrity, objectivity and independence in order to truly serve her purpose to the shareholders and the public.
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Sue must also note that the company’s head auditors are aware of discrepancies but chose to hide them. This means that some people in higher management, perhaps, the entire top management is aware of this practice. Having informed the Sr. VP of the situation and not getting the right response, Sue must next inform the president or the chief executive of the company. It could be possible that the head officer does not know about the inventory padding and the selling of expired products. In the event that the CEO would give the same dismissive reply, Sue would have to write to the board of directors.
But before Sue would do any of this, she must consult a lawyer and get the district manager on her side. Sue must also gather evidence in the event that management would refuse to hear her or even go so far as to become a threat to her security. She can take photographs and buy expired products. This is to be done discreetly. Sue would have to to act on this issue with utmost discretion in order to protect herself from reprisal and workplace bullying. Being the breadwinner of her family, Sue must discuss first with her husband about what she uncovered in the company.
She must get him to support her. If her husband is a person of integrity, then, Sue won’t have a problem getting him to support her decisions. Other than doing the reporting herself, Sue can provide some people a hint on the expired products so that these people would actually complain to the company. When the company would get complaints, Sue would have a better chance of having the board of directors listen to her.
AICPA: Center for Audit Quality. Ethics & Independence. Retrieved October 28, 2008, from http://thecaq. aicpa. org/Resources/Ethics+and+Independence/