The document discusses building successful employee relationships and ethics in the workplace. It provides an overview of different ethical perspectives like utilitarianism, rights, fairness and virtue. It then discusses integrity, trust and different frameworks for ethical decision making including the RESOLVEDD, Davis 7 step process and Markkula models. It presents examples of ethical dilemmas an internal auditor and employee of a company might face around suppressing findings or a report about poor working conditions. It emphasizes the importance of codes of ethics, evaluating alternatives and outcomes, and implementing ethical decisions to maintain integrity and trust.

1. Building Successful
Employee Relationships
A Cornerstone to Fraud Prevention
and Risk Management

2. Building Successful
Employee Relationships
A Cornerstone to Fraud Prevention
and Risk Management

3. Building Successful
Employee Relationships
A Cornerstone to Fraud Prevention
and Risk Management

4. Ethics Webinar
Ethics, Integrity & Trust

5. Elaine Nissley, Principal
MBA, CISA, PMP, CRISC, CRMA
Internal Audit & Management Consulting
ENissley@macpas.com
www.macpas.com

6. Webinar Objectives
Understand the Connection Between Ethics, Integrity and Trust.
Understand Different Ethical Perspectives
Understand different Ethical Decision Making Frameworks.
Learn How to Apply an Ethical Decision Making Framework

7. Ethical Perspectives
COMMON
GOOD
JUSTICE

8. Ethical Perspective
Utilitarian/Results
Principle
Consequences
Greatest Happiness
Pleasure vs Pain
Cautions
Individual Perspective
Impact to the Masses

9. Ethical Perspective
Moral Rights
Principle
Protects and respects moral rights
Six Moral Rights
Consent
Privacy
Freedom of Conscience
Free Speech
Due Process
Life and Safety

10. Ethical Perspective
Fairness/Justice
Principle
 Fair distribution of benefits and burdens, consistency
People with similar characteristics are treated the same
Procedural
Clear rules
Consistently applied
Compensatory
Compensated for cost of injuries by responsible party
Party not responsible if they had no control over circumstances

11. Ethical Perspective
Common Good
Principle
Good of the whole
Part of a larger community
Corporate initiatives
Social Responsibility
Community Service

12. Ethical Perspective
Virtue
Principle
Moral character traits
Honesty, courage, faithfulness, trustworthiness, integrity
Individual
Human virtues
What sort of person one should be

13. Ethical
Framework
UTILITARIAN
RIGHTS
FAIRNESS
COMMON GOOD
VIRTUE
“Ethics consists of
knowing what we
ought to do, and
such knowledge can
be taught.” Socrates

14. Integrity & Trust
"The most important persuasion tool you have in your entire arsenal is
integrity." - Zig Ziglar
"Have the courage to say no. Have the courage to face the truth. Do the
right thing because it is right. These are the magic keys to living your life
with integrity." - W. Clement Stone
“Trust is the glue of life. It's the most essential ingredient in effective
communication. It's the foundational principle that holds all
relationships.” - Stephen Covey

15. Ethical Decision Making Frameworks
RESOLVEDD Model
 Jonathan Kvanig
Davis 7 Step Process
 Michael Davis
Markkula Framework
 Markkula Center for Applied Ethics
PLUS Model
 Ethics & Compliance Initiative

16. RESOLVEDD
R review the facts
E estimate the problem
S list possible solutions
O state probable outcomes or consequences of each solution
L describe the likely impact of the solution
V explain the values upheld or infringed upon
E evaluate solutions in terms of outcomes, likely impact and values
D decide on the best solution
D defend the decision against objection
Raymond Pfeiffer and Ralph Forsberg, editors, Ethics on the Job: Cases and Strategies (Third Edition, Wadsworth, 2004).

17. Davis 7-Step Process
1. State problem
2. Check facts
3. State specifications
4. Develop list of five options
6. Make a tentative choice
7. Make final choice
A. Harm test
B. Publicity test
C. Defensibility test
D. Reversibility test
E. Virtue test
F. Professional test
G. Colleague test
H. Organization test
Michael Davis, “Developing and Using Cases to Teach Practical Ethics”, Teaching Philosophy, Volume 20, December 1997, pp. 353-385
5 TEST OPTIONS

18. Markkula Framework
1. Recognize an Ethical Issue
2. Get the Facts
3. Evaluate Alternatives
4. Make a tentative choice
5. Make final choice
Markkula Center for Applied Ethics at Santa Clara University.
Ethical Perspective

19. Plus
P = Policies
L = Legal
U = Universal
S = Self
Connects.ethics.org
Define
Problem
Define
Possible
Solutions
Evaluate
Alternatives
Implement
the
Solution
Evaluate
Outcomes

20. Apply Ethical Decision Making
Process
Code of Ethics/Conduct
Organizational
Professional
ETHICAL DECISION
APPLY
MODEL
CODE

22. Institute of
Internal
Auditors
Professional
Code
of Ethics
FRAMEWORK
INTEGRITY
OBJECTIVITY
CONFIDENTIALITY
COMPENTENCY
ethicsE

23. Summary
Integrity – consistency that establishes trust and provides the basis for
reliance on the auditor’s judgement.
Objectivity – Balanced assessment of all relevant circumstances, not
influenced by the auditor’s own interest or by the judgement of others.
Confidentiality – Respect for the value and ownership of information the
auditor receives. The auditor does not disclose information without
appropriate authority unless there is a legal or professional obligation.
Competency – Auditors have the knowledge skills and experience needed
to perform the services.

24. Internal Auditor Ethical Dilemma
Problem – You have just completed a governance audit of senior
management and the Board of Directors. There were several significant
findings. The President of the company asks you to change the report and
change or suppress many of the findings. It is quite clear that failure to
comply will result in the loss of your job.
Alternatives
1. Comply with the President’s request.
2. Compromise and reduce some of the findings but do not remove any
of the findings.
3. Report the incident through the organization’s hotline and do not
issue the report.
4. Issue the report with all of the findings intact and report the incident.

25. Evaluation of the Solutions
Alternative Solutions
1. Alter report as requested
2. Sugar coat the report
3. Whistleblow and do not issue
the report
4. Whistleblow and issue the
report
IIA Code of Ethics
Integrity
Objectivity
Confidentiality
Competency

26. Internal Auditor Ethical Dilemma
Implement the Decision
Issue the audit report
Report the President’s action on the Whistleblower Hotline.
Evaluate the Outcomes
The President terminates you.
You can still sleep at night
Human Resources investigates the whistleblower report
You are reinstated with back pay.

27. Hershey’s, Code of Ethical Business Conduct, Hershey, Pa. retrieved from www.thehersheycompany.com

28. Hershey’s Code of Ethical Business
Conduct
OUR COMMITMENT TO STOCKHOLDERS
We act honestly and transparently at all times, maintaining the trust our
stockholders have placed in us.
OUR COMMITMENT TO CONSUMERS
We maintain the trust consumers place in our brands, providing the best products
on the market and adhering to honest marketing practices.
OUR COMMITMENT TO THE GLOBAL COMMUNITY
We comply with all global trade laws, protecting our natural resources and
supporting the communities where we live, work and do business.
OUR COMMITMENT TO THE MARKETPLACE
We deal fairly with our business partners, competitors and suppliers, acting
ethically and upholding the law in everything we do.
Hershey’s, Code of Ethical Business Conduct, Hershey, Pa. retrieved from www.thehersheycompany.com

29. Ethical Dilemma
Problem – You have just received a tip on the hotline that factories in
China are requiring children to work ten hour days in poor environmental
conditions such as no ventilation and poor temperature controls.
Alternatives
1. Ignore the report because the organization’s most recent inspections
of the factories in China did not report these types of conditions.
2. Ignore since this is the only incident that has been reported.
3. Conduct a special investigation into the specific allegations.
4. Review the organization’s process for inspection of factories and use
the information from the tip to improve the process as needed to
address this concern.

30. Evaluation of the Solutions
Alternative Solutions
1. Rely on Company Inspections
2. Ignore and wait for additional
similar reports
3. Special Investigation
4. Assess and upgrade current
inspection process
Hershey Code of Ethical
Business Conduct
Maintain Stockholder Trust
Maintain Consumer Trust
Comply with Global Trade Laws
and Support Communities
Deal Fairly with Business
Partners, Competitors, and
Suppliers

31. Ethical Dilemma
Implement the Decision
Assess and upgrade current inspection processes.
Take action based upon the results of the assessment.
Evaluate the Outcomes
The company may need to conduct an inspection sooner than
planned
You have eliminated the risks of bad press and resulting reduced
market share.

33. Implementation of the Code
Written
Acknowledged
Training
Embedded in the culture
Evaluation
Socrates concluded that, “Ethics
consists of knowing what we
ought to do, and such knowledge
can be taught. “

34. DO YOU KNOW WHAT YOU DO NOT KNOW?
ETHICAL BUSINESS EVALUATION
Internal
External

35. THANK YOU!
Elaine Nissley, Principal
MBA, CISA, PMP, CRISC, CRMA
Internal Audit & Management Consulting
ENissley@macpas.com
www.macpas.com

38. Questions?
Elaine Nissley, Principal
MBA, CISA, PMP, CRISC, CRMA
Internal Audit & Management Consulting
ENissley@macpas.com
www.macpas.com