ACCA Strategic Professional · Strategic Business Leader · Audit and compliance
At Brandt Logistics, a finance clerk discovers that the finance director has been deferring the recognition of costs to meet a bonus target. She reports it to the audit committee chair, bypassing her line manager, and is then moved to a less desirable role. Which governance feature, if properly in place, would BEST have protected her and encouraged the disclosure?
A confidential whistleblowing policy overseen by the audit committee, with explicit protection from retaliation, would best protect her. It gives staff a safe route that bypasses implicated managers. Partner rotation concerns auditor familiarity, and raising issues with the finance director would send the concern to the person involved.
- AA confidential whistleblowing policy overseen by the audit committee, with protection against retaliationCorrect
- BA requirement that all concerns be raised first with the finance director
- CAn increase in the proportion of executive pay linked to profit
- DA rotation of the external audit partner every five years
Explanation
A whistleblowing channel overseen by the audit committee, with confidentiality and non-retaliation assurances, directly addresses the employee's fear and the demotion. Reporting to the finance director would route concerns to the person implicated. Partner rotation addresses auditor familiarity, not staff reporting, and profit-linked pay would worsen the incentive to manipulate.
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