By Fiona Kordiak, Director of Audit Services, Audit Scotland
Global Ethics Day is an opportunity for organisations around the world to explore the role of ethics in their work.
Ethics are the values and principles which should guide the daily work of all public servants – these are the seven principles of public life, set out by Lord Nolan in 1995. A key principle is that everyone who works in the public sector must act professionally to serve the best interests of Scottish society.Audit Scotland is encouraging Scottish public sector organisations and employees to use this day to consider why ethics are important to all of us. It is an opportunity to consider whether arrangements for ensuring ethical behaviour, such as codes of conduct, remain fit for purpose and for each of us to consider whether our own actions always meet the high standards expected of us.
Our vision is to be a world-class audit organisation that improves the use of public money. In the current challenging and complex environment for the public sector in Scotland, independent, objective and authoritative public audit helps to support a strong and effective system of governance, financial accountability and transparency.
In order to deliver world-class audit and ensure trust in our work, we need to apply the highest ethical standards. This is true now more than ever as recent high profile company collapses, such as Carillion and BHS, have dented public confidence in audit in the corporate sector. A key principle of all our work is to provide our stakeholders with trust and confidence that we audit in a professional manner. This applies to all our audits: financial, best value and performance.
The Financial Reporting Council’s Ethical Standard discusses ethical challenges for auditors under three headings: integrity, objectivity and independence.
The Scottish public sector audit model provides a high level of safeguards to our independence that go above and beyond these standards. For example, Scottish public sector bodies do not appoint their own auditors – the Auditor General and the Accounts Commission do this. The independent appointment of auditors is a unique feature and strength of public sector audit, and helps ensure the auditor is free from any potential or perceived conflict of interest or other pressure that might compromise their judgement.
Audit Scotland guards against ethical risks in many ways. For example, we include guidance on applying the Financial Reporting Council’s ethical standard in our Staff Handbook and require our staff to complete an annual declaration evidencing they comply with ethical values and principles. This identifies any issues that may impact on independence and the controls we put in place where there is a conflict.
However, high quality audit cannot be assured through rules and standards alone. We rely on each and every one of our staff embedding ethical principles in their day to day work – we must always strive to be vigilant and to guard against ethical risks. This will ensure that we always act with the highest standards of integrity, objectivity and independence.