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IAI Actuarial Core Principles · Business Finance · Ethical responsibilities of owners and managers

An employee in a company's finance team believes a senior manager is inflating revenue. The company has a whistleblowing policy. What is the most appropriate first step?

The employee should report the concern through the company's whistleblowing channel, such as the audit committee, with supporting facts. This protected, confidential route allows proper investigation without breaching confidentiality, whereas going public, ignoring it, or destroying records would be improper.

  1. APost the allegation on social media to force action
  2. BReport the concern through the whistleblowing channel, such as the audit committee, with supporting factsCorrect
  3. CIgnore it, since junior staff are not responsible for reporting
  4. DConfront the manager and demand a share of the bonus
  5. Delete the relevant records to avoid being implicated

Explanation

A whistleblowing policy provides a confidential, protected route, usually to the audit committee or a senior independent person. Public posting risks defamation and breaches confidentiality. Ignoring, demanding gain or destroying records are unethical or unlawful.

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