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ACCA Strategic Professional · Strategic Business Leader · Professionalism, ethical codes and the public interest

Marisol, an internal auditor at Kestrel Foods, finds that the finance director has been inflating inventory values to meet loan covenants. She reports it to the CEO, who tells her to leave it alone. Kestrel has a whistleblowing policy naming the audit committee chair as an alternative contact. What is the most appropriate next step for Marisol?

Marisol should escalate to the audit committee chair using the internal whistleblowing policy. This independent channel exists for cases where executive management fails to act, and internal escalation should normally be exhausted before external disclosure such as to the press.

  1. AReport the matter to the audit committee chair under the internal whistleblowing policyCorrect
  2. BDisclose the matter immediately to the press to protect the public interest
  3. CTake no further action since the CEO has already been informed
  4. DCorrect the inventory figures herself in the accounting records

Explanation

Whistleblowing good practice is to escalate through internal channels first. The audit committee chair is independent of executive management and is the designated route when the CEO fails to act. Going to the press first skips available internal routes, and altering records herself exceeds her role.

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