Preamble
The Office of the Comptroller and Auditor-General of Zimbabwe hereinafter called the Office” or OCAG has adopted this Code of Ethics as a guideline of conduct reflecting moral standards and ethical values that would ensure a credible environment of professionalism. This Code has been prepared in consonance with the International Organisation of Supreme Audit Institutions (INTOSAI) Code of Ethics and the International Federation of Accountants (IFAC) Code of Ethics.Failure to abide by the provisions of the Code may cause embarrassment to the Office and will call for necessary action.
All auditors shall observe the conditions of service and all regulations like the Public Service Regulations, 2000 as amended by Statutory Instrument 58A of 2001, the dress code, promulgated by the Public Service Commission and the Official Secrets Act etc. This code of Ethics is binding upon all auditors under the control of the Office and carries equal force as any other rules and regulations of the Public Service Commission.
Introduction
Background
The Office of the Comptroller and Auditor-General of Zimbabwe, which is the Supreme Audit Institution (SAI), deemed it essential to establish a Code of Ethics for its staff to inculcate a consistently high degree of moral and ethical values on the part of auditors in carrying out their activities as part of the SAI’s functions. It is also deemed necessary to foster confidence in the integrity, fairness and objectivity of the SAI by the entities whose activities are audited by the Office of the Comptroller and Auditor-General (OCAG).
Concept and Scope
A Code of Ethics is a comprehensive statement of the values and principles, which should guide the daily work of auditors. The independence, powers and responsibilities of auditors demand high ethical values. This Code of Ethics covers the ethical requirements of OCAG auditors including their professional obligations in particular. While this Code is intended to provide a clear definition of responsibilities, it cannot address all the possible challenges which the auditors may face in performing their responsibilities. The Code places clear responsibility on individual auditors for their own conduct and behaviour.
2.3 The Code may be altered from time to time to take account of changed circumstances and situations.
Purpose
It is of fundamental importance that the SAI is looked upon with trust, confidence and credibility by its stakeholders who comprise the following:
The Parliament;
The executive;
The general public and the audited entities;
The international bodies like, UN agencies;
Any other entity that may come under the purview of the SAI on request.
All of these stakeholders are entitled to expect the SAI’s conduct and approach to be above suspicion and reproach and worth of respect and trust.
Any deficiency or delinquency in the professional conduct or any improper conduct by auditors in their personal life places the integrity and the quality/validity of their audit work in an unfavourable scenario, and may raise doubts about the reliability and competence of the SAI, itself. Therefore, it is essential that the Code of Ethics is adhered to in order to promote trust and confidence in the auditors and their work.
Fundamental Principles An auditor is required to comply with the following fundamental principles:
Integrity An auditor should be straight forward in all professional and business relationships.
Independence Independence is the freedom from conditions that threaten objectivity or the appearance of objectivity.
c) Objectivity and Impartiality
An auditor should not allow bias, conflict of interest or undue influence of others to override professional or business judgements
Professional Competence and Due Care An auditor has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client/auditee or employer receives competent professional service based on current developments in practice, legislation and techniques.
Confidentiality
An auditor should respect the confidentiality of information acquired during the course of his work and should not disclose any such information to third parties without proper or specific authority. Confidential information acquired should not be used for the personal advantage of the auditor or third parties.
Professional Behaviour
An auditor should comply with relevant laws and regulations and should avoid any action that discredits the Office and the profession.
Integrity
Integrity is the core value of a Code of Ethics. Auditors have a duty to adhere to high standards of behaviour (e.g. honesty, fairness, candidness and truthfulness) in the course of their work and in their relationship with the officials of audited bodies. In order to sustain public confidence, the conduct of auditors should be above suspicion and reproach.
Integrity can be measured in terms of what is right and just. Integrity requires auditors to observe both the form and spirit of auditing and ethical standards. Auditors should not knowingly be a party to any illegal activity, or engage in acts that are discreditable to the auditing profession or to the SAI. Integrity also requires auditors to maintain irreproachable standards of professional conduct, make decisions with the public interest in mind, and apply absolute honesty in carrying out their work and in handling the resources of the Office (SAI)
Independence
Implicit in the notion of the integrity of the Office and the auditors are the concepts of independence and objectivity. Auditors must maintain and manifest independence and objectivity. If these characteristics are lacking, they will be unable to fulfill the mandate of the Office.
Independence from the audited entity and other interest groups is indispensable for auditors. This means that auditors should behave in a way that enhances and in no way diminishes their independence. It is essential that auditors are independent not only in fact but also in appearance. The independence of auditors should not be impaired by personal or external interests. Independence may be impaired for example, by external pressure or influence on auditors; prejudices held by auditors about individuals, audited entities, projects or programmes; previous employment of auditor with the audited entity; or personal or financial dealings which might cause conflicts of loyalties or of interests. Auditors have a responsibility to refrain from being involved in all matters in which they have a vested interest.
Objectivity and Impartiality
Auditors should try not only to be independent of audited bodies and other interest groups, but also to be objective and impartial in dealing with the issues and topics under their review.
There is need for objectivity and impartiality in all work conducted by auditors, particularly their reports. Conclusions and opinions in the reports should be based on evidence obtained and assembled in accordance with INTOSAI standards as well as Generally Accepted Accounting Practice.
Auditors should make use of information furnished by the audited entity and other sources. Information may be taken into consideration by the auditors in an impartial way in expressing their opinion. The auditors should also gather information about the views of the audited body and other entities. However, auditors’ own conclusions may remain unaffected by such views. They should not compromise their professional judgments because of bias, conflict of interest or the undue influence of others.
Professional Competence and Due Care
Auditors have a duty to conduct themselves in a competent and professional manner at all times and to apply high professional standards in carrying out their work with competence and impartiality. They have to dedicate themselves to the enhancement of quality and capability through programmes of professional education and personal development.
Auditors must not undertake work they are not competent to perform.Auditors should know and follow applicable auditing, accounting, financial management standards, policies, procedures and practices. They must also possess a good understanding of the constitutional, legal and institutional principles and standards governing the operations of the audited entity.Auditors should exercise due professional care in conducting and supervising the audit and in preparing related reports. The auditor should ensure that his work is reliable, timely, useful, convincing and candid.Auditors have a professional obligation to update and improve the skills required for the discharge of their professional responsibilities.
The performance of the auditor should appropriately be evaluated vis-à-vis:
The training that he has received to date;
The experience that he has acquired;
The support that he has received both from the Office as well as the auditee organization.
Confidentiality
It is the auditor’s duty to maintain the secrecy of information acquired from audit entities. The principle of confidentiality imposes an obligation on auditors to refrain from:
Disclosing outside the Office confidential information acquired as a result of professional and business relations without proper and specific authority or unless there is a legal or professional right or duty to disclose. Unauthorised disclosure of any official information either orally or in writing or its use for personal reasons is prohibited.
Using confidential information acquired as a result of professional and business relationships to their personal advantage or the advantage of third parties.
An auditor should maintain confidentiality even in a social environment. The auditor should be alert to the possibility of inadvertent disclosure, particularly in circumstances involving long association with a client/auditee or a close or immediate family member.
An auditor should also maintain confidentiality of information disclosed by a prospective client or auditee.
An auditor should also maintain confidentiality of information within the Office.
An auditor should take all reasonable steps to ensure that staff under the auditor’s control and persons from whom advice and assistance is obtained respect the auditor’s duty of confidentiality.
Professional Behaviour
The principle of professional behaviour imposes an obligation on auditors to comply with relevant laws and regulations and avoid any action that may bring discredit to the profession. This includes actions which a reasonable and informed third party, having knowledge of all relevant information, would conclude that the good reputation of the profession is affected in a negative way.
In marketing and promoting themselves and their work, auditors should not bring the profession into disrepute. Auditors should be honest and truthful and should not: make exaggerated claims for the services they are able to offer, the qualifications they possess, or experience they have gained or:
make disparaging reference or unsubstantiated comparisons to the work of others.
Auditors should be well mannered, show respect and polite social behaviour to all and sundry. In other words, they should exhibit habits of good breeding and etiquette.
GENERAL PRINCIPLES
Economy, Efficiency and Effectiveness of Operations Auditors have a responsibility to try earnestly to achieve cost reduction and ensure the efficiency and effectiveness of the Office and thus maximize Value for Money for the SAI.
Political Neutrality
It is important to maintain both the actual and perceived political neutrality of the SAI. Therefore, it is important that auditors maintain their independence from political influence in order to discharge their professional duties/audit responsibilities in an impartial way. This is relevant for auditors since SAIs work closely with the legislative authorities, the executive or other government entity empowered by law to consider the SAIs reports.
Conflicts of Interest
Auditors before embarking on an audit assignment, must notify their managers in charge of the audit that neither they nor their immediate family has any interests that could jeopardize or call into question their impartiality or objectivity in making judgments. This disclaimer also requires that the auditors inform the appropriate authorities in the Office, should any potential conflict of interest arise at a later date. They should fill in the disclaimer of interest form.
Auditors who believe that there is a possibility of a conflict of interest situation, should disclose the matter to their supervisor, who shall then determine, in consultation with superior authority, what steps should be appropriate to address the situation.
Conflict of interest situations may fall into the following categories:
Financial arrangements;
Exclusivity of service;
Past work experience
Gifts and Hospitality
Financial Arrangements
Auditors should not have any financial interest that could conflict in any way in discharging their responsibilities, call into question their motive regarding the matter in question or cause the Office embarrassment or loss of credibility.
A significant financial interest in an entity or any organization that has major or important dealings directly or indirectly with an audit entity might be considered as a conflict of interest. An auditor in such a situation must report to his or her supervisor or higher authority if appropriate. It is the responsibility of the auditor to make full and frank disclosure of situations where he or she suspects that a conflict of interest may exist. The Office is then obliged to determine whether a conflict of interest does exist and if so, what appropriate steps should be taken.
Exclusivity of Service
Auditors’ primary professional duty is to the OCAG. This duty takes precedence over any other working relationships. Any secondary employment relating to government activities, either directly or on behalf of an external third party, presents a prima facie conflict of interest and is therefore not allowed. Auditors are obliged to disclose to the Office, any secondary employment of this nature that they may have. The responsibility lies with the individual employee to inform the Office of such a situation.
Any unauthorized outside work during office hours by any employee is considered as improper and constitutes grounds for disciplinary action. The employee should not use any official information in any outside work.
Past Work Experience
Auditors must inform the Office of any situation where a former position might bring the propriety of the Office’s work into question.
If an auditor has previously worked for an auditee/client, he should bring this to the attention of the supervisor or appropriate higher authority.
Gifts and Hospitality
Auditors must not give the impression that they have been or may be influenced by any gift, hospitality or other consideration to show favour or disfavour to any person or entities being audited while acting in an official capacity. Effects of such favours are as follows:
An auditor, or an immediate or close family member may be offered gifts and hospitality by a client. Such an offer ordinarily gives rise to threats to compliance with the fundamental principles. For example, there could be threats to objectivity if a gift from a client is accepted.
The significance of such threats will depend on the nature, value and intent behind the offer. Where gifts or hospitality are offered which a reasonable and informed third party, having knowledge of all relevant information would consider clearly insignificant, an auditor may conclude that the offer is made in the formal course of business without the specific intent to influence decision making or to obtain information. In such cases, an auditor can generally conclude that there is no significant threat to compliance with the fundamental principles.
However, if threats are clearly significant, necessary safeguards should be applied to eliminate them or reduce them to an acceptable level. When the threats cannot be eliminated or reduced to an acceptable level through the application of safeguards, an auditor should not accept such an offer or hospitality.
Constructiveness
The main purpose of an audit is to ensure improvements in government activities. Therefore auditors should perform a constructive and positive role, which should be reflected in their audit reports. An auditor’s role also includes making recommendations to the management of audited entities for improvement. While doing so, care must be taken to ensure that the auditor does not assume the role of management in the provision of such advice. For example, they should avoid direct participation in formulating policies or in designing systems and related controls. Auditors should always bear in mind that the Office’s primary role is to give an assurance to Parliament and not to function in a management role. In case of any doubt, auditors should discuss and clarify with the supervisor in charge of the audit.
Conduct in Relation to Public Communication
All public communications (e.g. speeches, press releases, speaking at conferences etc.) by any employee of the SAI can only be made after the individual has received the appropriate authorization from the appropriate authority.
The SAI’s responsibility to Parliament implicitly generates a responsibility to the general public since Parliament is the representative of the general public. However, the SAI’s primary reporting relationship is not directly to the general public, but to Parliament through the Public Accounts Committee. The Audit Office can communicate its publication (the audit reports and other reports) to the general public through the media, but only after it has been presented to Parliament.
Personal Conduct
All auditors should ensure that they do not discriminate on the grounds of race, tribe, gender, religion, disability or illness.
Auditors also have a personal responsibility, so far as is reasonably practicable, to ensure that they do not put the health and safety of others at risk by their actions.
Auditors should arrange their personal financial affairs in such a way that they are able to live within their means. Borrowing from clients/auditees, financial delinquency or bankruptcy is prohibited.