![]() ![]() Therefore, they should be granted independence to effectively perform their oversight functions. Such specialized bodies have an important role in controlling public expenditure and ensuring accountability in the public sector. In many countries, the role of an external auditor of public institutions is assigned to specialized governmental body such as supreme audit institution or national audit office. In South Africa, for example, auditors are legally required to report any suspicious activity (UNODC, 2015). Module 13 of the E4J University Module Series on Integrity and Ethics in connection with the private and public sectors, respectively.īoth internal and external audits can play a substantial role in detecting corruption (Jeppesen, 2018). Audits are an example of integrity management mechanisms, which are discussed in more detail in Internal audits offer the management of an organization a snapshot of how policies and procedures are functioning, while external audits give a broader view and are often public. Internal audits review items such as the effectiveness of an organization's safeguards against fraud and corruption, whereas external audits often focus on an organization's financial statements and whether that organization has followed all relevant laws and regulations. Internal and external audits have different purposes. Audits can be internal, meaning that they are conducted by the organization itself, or external, which means they are conducted by another outside independent entity. Merriam-Webster dictionary, is "a formal investigation of an organization's or individual's accounts or financial situation" as well as "a methodical examination and review". A simple definition of an audit, provided by the Audits: traditional and blockchainĪn important method used to detect corruption in both public and private sector organizations is the auditing process. There are other methods for detecting corruption, such as asset and interest declarations and sample surveys however, given its introductory nature, this Module focuses on the core methods of auditing and reporting. Given the importance of whistle-blowing, a subsequent segment is dedicated to approaches that encourage such reporting. Where relevant, consideration is given to the use of modern technology in detecting corruption, including blockchain technology, smartphone applications and open data web platforms. The strengths and weaknesses of these methods are discussed in the following paragraphs. ![]() Detection mechanisms: auditing and reportingĬorruption can be detected through a variety of methods, the most common of which are audits (internal and external) and reports (by citizens, journalists, whistle-blowers and self-reporting). ![]()
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