Partner, general director of SIA Nexia Audit Advice, doctor of economics, Andrejs Ponomarjovs participated in the panel discussion “Ethics Dilemmas” in the conference of the institute of internal auditors taking place on 13th and 14th of September, 2018.

As Dr Andrejs Ponomarjovs, noted, creating the department of the internal audit, the management of the company, from the start has to determine the degree of it’s independence. Along with that, it is important to consider, that this decision is not simple and in many aspects, the efficiency of work of the internal auditors depends on it. Firstly, absolute independence of the internal audit is unlikely, since internal auditors are employees of the company and their professional and career development depends on the management of the company. Secondly, the level of organizational independence of the internal audit department has a direct impact on the objectivity of internal auditors. Along with that, the type of organizational subordination of the internal audit department influences the attitude of managers of different levels to its recommendations.

 

During the discussion, Dr Andrejs Ponomarjovs also emphasized, that in International Standards of Internal Auditing, is stated, that the independence of the internal auditor – is the ability to freely and objectively do his tasks and impartially express his opinion. The independence is reached with the special organizational status of the internal audit department. Herewith, the manager of the internal audit function has to be subordinate directly to the person, who will be able to provide the independence of the actions of auditors (including the access to any information) and take adequate measures for the implementation of the auditor recommendations. The objectivity is also considered the ability of the auditor to honestly and impartially do his job and clearly state and defend his opinion, not adopting it to the opinion of the higher-rank managers.