This document discusses issues arising from a case study on the African Peer Review Mechanism (APRM), a body formed to encourage good governance. The main issues discussed are whistleblowing, values, management, and fraud. Whistleblowing can benefit organizations by exposing misconduct but whistleblowers often face retaliation. Values are important but were not properly implemented at APRM. Management failed to establish proper policies and oversight, allowing fraud to occur under the APRM's acting director Assefa Shifa, who refused an audit and misused funds. Recommendations include strengthening whistleblower protections, using principles instead of vague values, requiring internal audits, and rotating external auditors to prevent improper relationships from forming.

1. WHO AUDITS THE AUDITORS
APRM SCANDAL
‘NAME : CHABOTA TUDUETSO TEBOGO
COURSE: ACCOUNTING & FINANCE
GROUP : 1 & 3
MODULE : THE PROFESSIONAL ACCOUNTANT
MODULE LEADER : Mrs. Virginia ndung’u
MODULE CODE : AF-4PD-600
DATE OF SUBMISSION : 16 April 2015

2. 1
Contents
EXECUTIVE SUMMARY .................................................................................................................2
INTRODUCTION..............................................................................................................................3
ISSUES AT HAND ...........................................................................................................................4
WHISTLE BLOWING ...................................................................................................................4
VALUES .......................................................................................................................................5
MANAGEMENT............................................................................................................................6
FRAUD .........................................................................................................................................7
CONCLUSION .............................................................................................................................8
RECOMMENDATIONS....................................................................................................................9
Bibliography.....................................................................................................................................10

3. 2
EXECUTIVE SUMMARY
This report aims to analyze the issues discovered in the case study regarding African
Peer Review Mechanism which is a body formed with the main purpose encouraging
good governance among employees. Matters arising were values, whistle blowing, fraud
and management. In discussing these matters, it was found that they have a great impact
on managers and employees as follows. Whistle blowers are seen as heroes by others
and a nuisance by others whilst managers are seen as incompetent since employees
were able to observe misconduct in organization when they failed. Apart from that values
put pressure on manager s as they are in charge of making sure that objectives are
reached by the employees and employees have to carry themselves in a certain manner.
Management is the ability of a team to create policies by which an organization operates
with, the burden rests heavily on managers rather than employees. Lastly fraud which if
not detected early could lead to the liquidation of a company because of misuse of funds.
Accompanying these matters are recommendations which include tightening the
protection of whistle blowers, creation of policies which conform to international
standards.

4. 3
INTRODUCTION
The organizational structure is very critical aspect in the efficient running of the company
hence if it is not clearly outlined from the establishment of the company it will be very
difficult to monitor and control certain aspects or activities in the company. This report
serves to outline issues that management and employees face as a result of fraud, values,
management and whistle blowing. Aims of this report are to find out how these issues
affect employees and management in general and according to the case study “Who
Audits the Auditors: Scandal at the Heart of the African Peer Review Mechanism”. With
these issues outlined the main objective is to bring about the results of these issued if not
handled accordingly. At the heart of this scandal is one sir by the name Assefa Shifa who
is faced with accusations of corruption, fraud, mismanagement and intimidation.

5. 4
ISSUES AT HAND
WHISTLE BLOWING
This term is described by (Jubb, 1999) as an act of ethical behavior where an individual
reports illegal or unethical activities performed by either an employee or employer to the
proper authorities. This individual will most of the time have access to the record of such
illegal acts and discloses it to the public, in addition to that, it is a deliberate non-obligatory
act and usually the individual will not expect anything in return.
Recently at the heart of whistle blowing is Edward Snowden, an employee of the United
States of America’s National Security Agency’s (NSA) revealed the misuse of the
domestic surveillance programme. In his accusations he claims that the NSA is violating
the citizen’s privacy, internet freedom as well as civil rights (Yeoh, 2014). Although the
media has made it seem as if Mr. Snowden is the public’s savior the NSA are charging
him with “espionage, theft and conversion of government property”
(Finn and Horwitz, 2013). Many problems come about trying to do the right thing
especially for the employee, as with the case of Mr. Snowden, what he thought the public
needed to know landed him in trouble. The channel of exposing such acts rests on
whether it should be reported internally or externally. This is strongly influenced by
whether the party receiving the information will act upon it. Most of the time employees
do not find it useful to report the malpractices of the company internally but rather
externally because of the way the media will publicize resulting in the public wanting to
know more about the accusations thus the proper authorities will investigate further.
Most of the time you will find that big corporations have multiple issues of misconduct but
because of lack of protection for whistle blowers very few will find the courage to report
such instances merely because of the fear of being demoted or dismissed, this is because
corporations do not take lightly to accusations and will make sure to make an example of
anyone who had even the slightest idea of reporting them. Hence in the case study the
whistle blower wants to remain anonymous, same goes to the Cameroonian minister who
did not want to give any information regarding the nepotism and corruption taking place
at his government due to fear of consequential retribution should he share such

6. 5
information because it is quite clear that all members and partners are alert of the
misconducts taking place. Managers will encourage whistle blowing as a tool to promote
their integrity and accountability. But when employees report externally it taints the image
of the management because it creates the perception that management is incompetent
of handling the employees and monitoring the proceedings of the company. Whistle
blowing is seen as a tool for ethical governance. Employees who are whistle blowers
face discrimination from their employers after reporting because now they come across
as untrustworthy.
VALUES
These are described as code of conduct which an organization must live up to or a set of
rules by which everyone employed in the organization must follow, basically it is a set of
guidelines that assist in the governing of the organization (Osborne, 2013). The problem
arises when these values are not followed or implemented. Values come into play when
decisions have to be made, say for an example introduction of a new product or service.
One has to ask the question “in taking this direction, are we violating any one of our
values” and in doing so assessing whether there would be grave consequences in
heretical these values. These decisions can be influence by the profit making motive such
that management can be blindsided by the profit they may make from going against their
values forgetting that in the end it’s not just about making profit. Once an organization
has made it clear to the public what their values are, there is a certain level of expectation
that the public requires from the organization, in a way bridges of trust are put up and
once these bridges are destroyed. (Mullins, 1999) Suggests that in order for values to be
carried out effectively it is important to find common ground between values and
obligations to customers.
The African Peer Review Mechanism (APRM)’s values are merely to give a fair and
truthful mutual assessment of governments of countries within the body. Since APRM’s
establishment, the organization has lost sight of what is important. The employees have
been greatly affected because they are very aware of the illegal dealings taking place but
because nothing is being done about it they are merely just in it to put bread on the table.
Once those at the top of the hierarchy of employment lose sight of what is important it

7. 6
becomes difficult for the employees to still carry on the values set as they feel they have
already been tainted as you will see with the case study.
MANAGEMENT
(Mullins, 1999) goes further to describe management as the ability of those in charge to
execute policies, objectives and aims set by the company and also making sure that every
action or decision taken is in accordance with internal and external regulations, although
it is subject to several interpretations. To support this theory is (James & Ntayi, 2010)
suggesting that in order to get satisfactory results from an organization as a whole, the
management needs to make sure that individuals or teams need to have an
understanding of the organizations procedures. Corporate governance can be applied
because it is the management’s responsibility to make sure that the organization abides
by the rules and regulations set in the economy for their market. The enron scandal will
go down in history as the epitome of mismanagement because of the millions of dollars
investors lost and through this the Sarbanes Oxley Act (SOX) formed in order to regulate
accounting policies as well.
Problems arising from the enron scandal were mainly because of relationships forming
between external auditors and those in authority thus coming up with a plan to falsify
financial statements. The auditors that were hired were providing their services for a
prolonged amount of time which according to policies was exceeded. But because of lack
of values and ethics those in authority became greedy.
Throughout the case study of APRM, notice how fraud committed by Assefa Shifa is the
main issue. From the get go there were problems arising, first and foremost it did not
make sense why Mr. Shifa would want to take a job which is at a lower level than his
current job occupation. Like the auditors and enron, Mr. Shifa performed his secretarial
work for longer what had been specified which was supposed to be a 3 month contract.
In addition to that he was occupying two job positions for two organizations at the same
time. Mr. Shifa created an environment of fear for those that were working under him for
he would hire and fire employees without authorization or informing those in the panel
and did not forget to make sure that they knew that he had all the power as he signed
their paychecks. Furthermore an attendee of the annual summit questioned the

8. 7
procedures inappointing the Acting director which is also an indicator of mismanagement.
To add on the organization did not have policies set which made it difficult for employees
to account for certain transactions creating incompetency of workers.
FRAUD
(Osborne, 2013) Suggests that fraud is the intentional illegal transfer of funds to personal
account, falsifying financial statements with the intent for personal gain. In order for an
organization to take action against fraud it must first establish the type of fraud taking
place which include
 Fraud by false representation -where a person makes any representation which they
know is misleading
 Fraud by failing to disclose information -where a person fails to disclose any
information to a third party which he/she has a legal duty to disclose
 Fraud by abuse of position –where a person occupies a position where they are
expected to safeguard the financial interest of another person, and abuses that
position
In the case of APRM the type of fraud experienced was failing to disclose information
which was shown by Mr. Shifa when he refused to let Deloitte have access to required
information which would aid in the forensic audit of APRM’s Trust Fund. According to the
source this is because if the forensic audit is carried out it would reveal that there had
been payments that were murky. In addition to the problem, Mr. Shifa was favored by
those in high places because Shifa knew of their illegal dealings and did not want these
financial statements reviewed hence supporting Shifa’s decision to refuse to share the
information above all it was found that Shifa was in charge of authorizing S&T claims, his
included which is not according to policies. Above all the preparation of financial
statements were not up to standard because the organization did not set any policies for
accounting for some transactions.

9. 8
CONCLUSION
In evidence you will perceive that many things go into making an organization successful
but reality kicks in because it will not always be smooth sailing hence factors that hinder
the success of a company have to be identified at an early stage or at the stage they
occur and be dealt with. With the issues discussed it is important to remember that
management is an essential part of running an organization, in fact it is the basis. This is
because through management policies are set so that employees have a guideline in
which to perform tasks. Values create goals for the organization so that it never loses
sight but it does not help when values are just stated, it must be made sure that they are
implemented. Clearly there will always be issues that threaten the management making
it seem as if though they are not doing their job but in all fact it all goes back to ethics.

10. 9
RECOMMENDATIONS
To address the possible solutions to combating the issues discussed it is important to
make sure that they are SMART, which is that they should be specific, measurable,
achievable, realistic and time bound. Recommendations will tend to be same among
companies due to similar situations.
 Protection for whistle blowers against their employers should be provided by
external authorities or should be included in their contract as part of the terms. This
way if the employer fires the employee the employee can charge them with unfair
dismissal
 Principles instead of values should be implemented (Louise & Parsons, 2004).
They give clarity to employers of how to behave at the work place since they are
realistic and state what is acceptable and not acceptable at the workplace.
 For every reporting that needs to be done, policies need to be set but should also
comply with external and international regulations. Training should be done in
order to equip the employees with the skills to apply these policies.
 Internal auditors should be made compulsory for big and important corporations
especially for nonprofit organizations so as to indicate how donated funds were
used.
 Appointment of important positions should be passed through the board and not
just by an individual in order to avoid nepotism.
 Auditors should be rotated every three years so as to avoid friendships building
among the auditors and their employers

11. 10
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managedperformance. Internation Journalof Education Management, 24(6),pp.507-530.
Louise,P.J.& Parsons,F.C., 2004. Principles notValues. Industrialand CommercialTraining , 36(1), pp.
38-40.
Maroun, W. & Atkins,J.,2014. Whistle-blowingbyExternal auditorsinSouthAfrica. Acoounting,Auditing
and Accountability, 27(5),pp.834-862.
Mullins,L.J.,1999. Managementand OragnizationalBehaviour. 5ed.s.l.:Financial TimesPitman
Publishing.
Osborne,J.,2013. Professionalethicsin accounting. Worcester:Osborne BooksLimited.
Yeoh,P.,2014. Whistleblowing:motivations,corporate self regulationandthe law. InternationalJournal
of Law and Management, 56(6),pp.459-474.