Internal Audit As Anti Corruption Measure Accounting Essay

The being of corruptness has been for ages in one signifier or another. Corruptness is a term with many significances affecting both pecuniary and non-monetary benefit, but by and large it entails misapplying one ‘s office for a private addition or unofficial terminal. It involves ( William, 2003 ) . The term corruptness mean different thing to different people, state and civilization, that is, it is ; context-based depending on the person, political orientation, civilization or other context ( Yadong, 2005 ) . Morley ( 1998 ) besides defines corruptness as an illicit exchange of resources affecting the usage or maltreatment of public or corporate duty for private terminalsYadong ( 2005 ) describes corruptness as an illicit exchange of resources affecting the usage or maltreatment of office for private terminals. Normally, work environment and civilization could either Foster or discourage corrupt patterns depending on cultural perceptual experience of corruptness.

( Barth, and Schipper, 2008 ) . For illustration, until late, United Kingdom ‘s anti-bribery act old did non incorporate a “ facilitating payments ” exclusion ( Bribery Act 2010 ) .Harmonizing to Hjalmar and Weaver ( 1960 ) , many directors work in an administration carry out different functions and maps.

This hierarchy of is referred to as Level of Management with different duty at each degree within each place. However, each degree of is critical to guaranting effectual overall operation of the administration.This is defined as three degree direction hierarchies viz. ;Administrative or Top Degree of Management.Executive or Middle Level of Management.

Supervisory or Lower Level of Management.


The board of managers and Chief Executive Officer ( CEO ) /General Manager ( GM ) /Managing Director ( MD ) by and large constitutes the administrative/top direction degree with functions in implementing and beef uping a company capableness of covering with fiscal dirts as they bear the concluding duty of the internal control the organisational system.

The Middle Level Management consists of the Departmental Heads ( HOD ) like Finance Managers and Purchase Managers, Branch Managers Branch or Unit Heads ) , and the Junior ( Assistant Finance Managers, Assistant Purchase Managers ) . These degrees of Directors are selected by the Top Level Management ( Webb, 2010 ) .The lower degree direction are selected by in-between degree direction and consists of the Foremen and the Supervisors. This degree is besides referred to as Operative/Supervisory degree or First Line of Management ( Webb, 2010 ) .Corruptness exists at different degree of direction in an administration.

Though each degree reinforces each other, the more hierarchal degrees involved the more incidences and badness organisational corruptness ( Argandona, 2003 ) . For the intent of this survey, focal point would be on in-between degree directors. In the bar of corruptness, systemic alteration becomes high. Equally of import as general system alterations is besides looking for ways of contending corruptness at different degree within the system because organizational credibleness may be at interest if exposed ; therefore the demand for sensible schemes, policies and programs to understate hazards ( Ackkerman, 2001 ) .System Auditing are of import for rectifying execution of criterions and make an ethical concern environment that supports administration ‘s image saving, improves employee morale, and reduces fraud.For excessively long, organisations have non recognized the of import function of an internal audit section. Ali and Owais ( 2013 ) reported that advanced states have late shown an increasing involvement in the internal audit profession because of the exposure of big companies to dirts in the late 1890ss of the last century. Therefore, internal audit has become an built-in constituent of administrations ‘ corporate administration mechanisms to beef up hazard direction systems and heighten fiscal coverage quality ( Sucherand and Zelenka, 1996 ) .

Many other writers sees internal auditing as important resource in corporate administration providing services at different direction degrees and external hearers ( DeZoort et al. , 2002 ; Dillar et al. , 2004 ) .Internal auditing is an independent activity, established by direction, to analyze and measure organizational hazard, direction procedures and control systems and do recommendations for bettermentsThe constitution of Institute of Internal Auditors ( IIA ) corrected the impression about internal audit.

IIA indicated that internal audit does non be to judge the rightness of a company ‘s aims or schemes to nonsubjective accomplishment, but to add value in several cardinal countries. For illustration, an internal hearer ‘s cognition of the operations of a concern is critical in assisting direction identify hazards, and control failings. A more clarified function of internal audit is the new dimensions in enabling it map to battle corruptness ( IIA 1999 ) .Gramling and Hermanson, ( 2006 ) defined Internal Auditing as an independent, nonsubjective confidence and consulting activity designed to add value and better an organisation ‘s operations. It helps an organisation carry through its aims by conveying a systematic, disciplined attack to measure and better the effectivity of hazard direction, control, and administration procedures.

This definition accent helping direction and at the same clip objectively guaranting all direction degrees in believing proactively and top directors are seting in topographic point anticorruption mechanisms. This is an epoch when more focal point is being placed on good administration patterns and sound hazard direction. It is clear that both the accounting and audit professions have an of import function to play now and in the hereafter in preventing, observing and describing on corruptness.This survey proposes to analyze the impact of how internal audit schemes construction helps to minimise the incidence of corruptness patterns among in-between degree directors.

1.2: Justification

One major hindrance to economic development of any administration is corruptness which frequently could do other organized offenses. Equally corruptness could damage the unity of administration and later development of assorted organizational system jobs.

It is non sufficient to develop a program for contending corruptness without analysis of chance of corruptness patterns within different direction degrees and the impact of established section within the organizational model of control system.Middle degree directors give recommendations or advice to the top degree direction and chiefly executors of organizational policies and programs which are made by the top degree direction every bit good as intermediary between top and lower direction. It is hence pertinent that when corruptness is prevailing in in-between degree directors, it poses a menace to non merely the administration but besides to the larger society. Among the corruptness patterns within in-between degree directors that easy come to mind include ; bribery or kickbacks, extortion, nepotism, fraud, and self-interest among others.This issue is a big concern for the companies because value maximization and company wealth frequently depend on its members. Therefore, this survey is critical to casting visible radiation on the impact of internal auditing in commanding corruptness among in-between degree directors in order to add value and achieve company ‘s scheme.


3 Aim


The general aim of this survey is to find the impact of internal auditing in commanding corruptness in in-between degree directors.


To measure the apprehension of corruptness among in-between degree directors and internal audit.To discourse at least two UK and one international criterions puting and ordinances for internal audit usageTo find the effectivity of internal audit toll in forestalling corruptness among in-between degree directors.

To understand the constituents of internal control in forestalling corruptness among in-between degree director.To place the function of internal audit system in forestalling corruptness among in-between degree director.


It is pertinent that an organisation is a basic unit of corruptness pattern. The in-between degree serves as intermediary to the top and low degree directors thereby, giving them direct contacts to all classs of company staff. Yadong, ( 2005 ) reported that most corruptness occurs in the low degree directors. The in-between degree directors could easy be drag into the fraud if attention is non taking or deliberately be conformity. A focal point on commanding corruptness among in-between degree directors warrants peculiar attending.

These behaviors in bend could do great harm in the countries of strategic hindrance, competitory disadvantage and organisational lack. To rectify or avoid these amendss, organisations must set up a formidable substructure resistant to pervert patterns ( Argandona, 2003 ) . Internal audit has a alone function in act uponing direction of hazards by guaranting proactive, preventative, detective and contentious steps in contending corruptness



The chief hypothesis of this survey is that the being of internal audit construction plays an of import function in minimising the incidence of deceitful practises among in-between degree directors. The statements of hypothesis for this survey include:Ha‚ˆ : There is no grounds that suggests internal audit as an anti-corruption step among in-between degree directors.HN- : There is grounds that suggests internal audit as an anti-corruption step among in-between degree directors.


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