ACCA Strategic Professional · Strategic Business Leader · Management and internal control systems

Tamsin, an internal auditor at Okoro Energy, discovers that the finance director appears to have manipulated reserve estimates. She fears retaliation if she reports it to her line manager, who reports to the finance director. Which course best reflects good governance practice for whistleblowing?

The best practice is a confidential reporting channel direct to the audit committee chair or independent non-executives. This bypasses the conflicted finance director and line chain, protects the whistleblower from retaliation, and lets independent directors investigate. External disclosure is only a last resort.

AProvide a confidential reporting channel direct to the audit committee chair or non-executive directorsCorrect
BRequire all concerns to go through line management first
CLeave the matter to the external auditors at year end
DPublicise the concern in the media immediately

Explanation

Good practice, as in governance codes, is a confidential route independent of executive management, typically to the audit committee, with protection from retaliation. Line management is conflicted here. External disclosure is a later resort, not the first step.

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