Braselino Assunção
We are living in a historical time. Delações premiadas (plea bargains in exchange for reduced sentence or pardons) are the opening lines of a book about Brazil that everyone thought existed, but that hadn’t been exposed in its details, structures and the painful reality of corporate fraud. Among the countless revelations published daily by the media, people also came to understand the role of the internal auditor, one of the leading roles in the eternal fight between ethics and crime. Its mission is to mitigate risks, prevent financial loss and identify processes that could be corrupted by criminals, even if that means pointing out a slip by a colleague of years of experience.
Operation Car Wash has shown the country that the role of the internal auditor is essencial to corporations, public or private. But this professional, as well as efficient, must be ethical, resistant to the temptations of a voracious scenario, which has always had impunity and the misfortune of the so-called “Brazilian way” as common denominators.
The temptations are countless and constant. A recent survey conducted in 166 countries, released by The Institute of Internal Auditors, reveals that 44% of Brazilian auditors have been pressured at some point by their superiors to alter report results in their organizations. This worrisome metric is well above the global average of 29%.
Having qualified professionals and structured auditing departments have become constant pursuits in the corporate world. One of the main reasons for the boom in the industry was the 2002 Sarbanes-Oxley Act, which has tightened its grip around the risk of fraud, especially in larger companies. Since then, there has been continuous appreciation for the profession, including in Brazil.
The crisis in the country and the corruption scandals at all economic levels have antagonistically also intensified the importance of the profession. Proof of this was the last Brazilian Congress of Internal Audit, where 750 participants came together in 2016, a historical record that is expected to be broken again in this year's edition, at the end of November in Rio de Janeiro.
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By GlobalDataInvestments in a preventive role for the areas of compliance and internal audit have been satisfactory, but still far from ideal. The Anti-Corruption Act, which began to criminalize companies, also aids in the eternal mission of highlighting the need to take a stand in our country, for more transparent, fair and honest corporate environments.
Having stakeholder and management support in an organization is key, but the biggest challenge is to create a team of prepared and ethical professionals. And this will only be possible if investments are made in training and hiring of certified auditors, who employ the international professional best practices set out in the IPPF – International Professional Pratices Framework – considered the internal auditor’s handbook.
Potential criminals need to be aware that, in that specific organization, there are process keepers, a team of auditors with a holistic standpoint of the entire company, capable of avoiding million dolar losses on behalf of the corporation, armored against any bribe offers or requests to turn a blind eye to the misuse of resources.
In the past, the internal auditor was only seen as a sheriff, a detective with a close eye on employee slips. Today, the modern concept has expanded its role. It is now seen as able to add value by recommending improvements, including adjustments to the organization’s culture. However, this image of a serious, respectful executive, someone who will not accept internal malfeasance, should continue to be emphasized, even more so now, in the Car Wash era. It is not a matter of instilling fear into the corporate environment, but rather of showing the tempters and tempted that corruption does not belong there, it is not welcome and will certainly be cohibited and punished.