The document outlines a webinar led by John J. Hall, CPA, focusing on the intersection of ethics, integrity, compliance, and audit. It discusses various ethical concerns, the importance of maintaining integrity in organizations, and roles that can help uphold ethical standards, including monitoring and deterrence. The session aims to engage participants in understanding ethical decision-making and provides avenues for ongoing education and discussion.

1. Where ethics,
integrity,
compliance &
audit
intersect
John J. Hall, CPA
September 12, 2024

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3. Introduction John J. Hall, CPA
President | Hall Consulting, Inc.
• 45 years as an auditor, speaker, skills trainer,
consultant and business owner
• Specialty is effective Business Risk Management
and Response (including Fraud Risk Management)
Contact: www.johnhallspeaker.com/contact/
Website: www.JohnHallSpeaker.com
Direct phone (U.S.): 312-560-9931
3

4. 1. Starting Point
2. So…Where are We Now
3. Let’s Play Better, Worse or the Same
4. The Slippery Slope of Integrity Erosion
5. So…Where Does That Leave Us?
6. Your Questions
Agenda
Where ethics, integrity, compliance & audit intersect
4

5. 1. Starting Point
2. So…Where are We Now
3. Let’s Play Better, Worse or the Same
4. The Slippery Slope of Integrity Erosion
5. So…Where Does That Leave Us?
6. Your Questions
Agenda
Where ethics, integrity, compliance & audit intersect
5

6. 6
Personal
Individual’s basic notion of right and wrong
Organizational
Consciously defined by organizations to promote
consistent integrity in the members
Ethics – Two Categories
Where ethics, integrity, compliance & audit intersect

7. 7
Personal
Individual’s basic notion of right and wrong
Organizational
Consciously defined by organizations to promote
consistent integrity in the members
Ethics – Two Categories
Where ethics, integrity, compliance & audit intersect

8. 8
In Theory…
Good Ethics
is
Good Business
Where ethics, integrity, compliance & audit intersect

9. ETHICS
A philosophical discipline that
describes and directs moral conduct
Where ethics, integrity, compliance & audit intersect
9

10. ETHICS
A philosophical discipline that
describes and directs moral conduct
The Foundation
Where ethics, integrity, compliance & audit intersect
10

11. ETHICS
A philosophical discipline that
describes and directs moral conduct
INTENTIONS
The Foundation
Where ethics, integrity, compliance & audit intersect
11

12. ETHICS
A philosophical discipline that
describes and directs moral conduct
INTEGRITY
Consistent and uncompromising adherence
to strong moral and ethical principles and values
INTENTIONS
Where ethics, integrity, compliance & audit intersect
12

13. ETHICS
A philosophical discipline that
describes and directs moral conduct
INTEGRITY
Consistent and uncompromising adherence
to strong moral and ethical principles and values
INTENTIONS
ACTIONS
Where ethics, integrity, compliance & audit intersect
13

14. Ethics / Integrity
Disconnect
Risk
THE Core Issue
Where ethics, integrity, compliance & audit intersect
14

15. Why do intelligent people stare
right into the face of ethics –
and then do
the wrong thing anyway?
I Keep Wondering…
Where ethics, integrity, compliance & audit intersect
15

16. ETHICS
A philosophical discipline that
describes and directs moral conduct
INTEGRITY
Consistent and uncompromising adherence
to strong moral and ethical principles and values
INTENTIONS
ACTIONS
RATIONALIZATION
Where ethics, integrity, compliance & audit intersect
16

17. ETHICS
A philosophical discipline that
describes and directs moral conduct
INTEGRITY
Consistent and uncompromising adherence
to strong moral and ethical principles and values
COMPLIANCE
A legal discipline that describes rules by which we
determine whether or not actions are acceptable
INTENTIONS
ACTIONS
Where ethics, integrity, compliance & audit intersect
17

18. ETHICS
A philosophical discipline that
describes and directs moral conduct
INTEGRITY
Consistent and uncompromising adherence
to strong moral and ethical principles and values
COMPLIANCE
A legal discipline that describes rules by which we
determine whether or not actions are acceptable
INTENTIONS
ACTIONS
VERIFICATION
Where ethics, integrity, compliance & audit intersect
18

19. ETHICS
A philosophical discipline that
describes and directs moral conduct
INTEGRITY
Consistent and uncompromising adherence
to strong moral and ethical principles and values
COMPLIANCE
A legal discipline that describes rules by which we
determine whether or not actions are acceptable
INTENTIONS
ACTIONS
VERIFICATION
Our Role????
Where ethics, integrity, compliance & audit intersect
19

20. ETHICS
A philosophical discipline that
describes and directs moral conduct
INTEGRITY
Consistent and uncompromising adherence
to strong moral and ethical principles and values
COMPLIANCE
A legal discipline that describes rules by which we
determine whether or not actions are acceptable
INTENTIONS
ACTIONS
Something is Missing
VERIFICATION
Where ethics, integrity, compliance & audit intersect
20

21. ETHICS
A philosophical discipline that
describes and directs moral conduct
INTEGRITY
Consistent and uncompromising adherence
to strong moral and ethical principles and values
COMPLIANCE
A legal discipline that describes rules by which we
determine whether or not actions are acceptable
INTENTIONS
ACTIONS
VERIFICATION
ACCOUNTABILITY
Where ethics, integrity, compliance & audit intersect
21

22. 22
What happens if a leg is broken or missing?
Where ethics, integrity, compliance & audit intersect

23. What happens if a leg is broken or missing?
What if two legs…
Where ethics, integrity, compliance & audit intersect
23

24. 1. Starting Point
2. So…Where are We Now
3. Let’s Play Better, Worse or the Same
4. The Slippery Slope of Integrity Erosion
5. So…Where Does That Leave Us?
6. Your Questions
Agenda
Where ethics, integrity, compliance & audit intersect
30

25. A few ethics
concerns
✓ Shading the truth – ignoring the truth
Where ethics, integrity, compliance & audit intersect
31

26. A few ethics
concerns
✓ Shading the truth – ignoring the truth
✓ Rationalization of pretty much everything
Where ethics, integrity, compliance & audit intersect
32

27. A few ethics
concerns
✓ Shading the truth – ignoring the truth
✓ Rationalization of pretty much everything
✓ Back-room shadow deals
Where ethics, integrity, compliance & audit intersect
33

28. Shadow Deals
Undisclosed non-transparent relationship that has a real or
apparent impact on what others perceive.
Shadow deals create the risk that judgement or actions regarding a
primary interest will be unduly influenced by a secondary interest.
Where ethics, integrity, compliance & audit intersect
34

29. A few ethics
concerns
✓ Shading the truth – ignoring the truth
✓ Rationalization of pretty much everything
✓ Back-room shadow deals
✓ Leadership integrity erosion
Where ethics, integrity, compliance & audit intersect
35

30. Plus Nissan, Mitsubishi, Fiat Chrysler…
Where ethics, integrity, compliance & audit intersect
36

31. And now Cummins…
Where ethics, integrity, compliance & audit intersect
37

32. And now Cummins…
Where ethics, integrity, compliance & audit intersect
38

33. And now Cummins…
Where ethics, integrity, compliance & audit intersect
39

34. And their customers…
Where ethics, integrity, compliance & audit intersect
40

35. And their customers…
Where ethics, integrity, compliance & audit intersect
41

36. Boeing 737 MAX
Where ethics, integrity, compliance & audit intersect
42

37. Alaska Airlines 737 MAX
Where ethics, integrity, compliance & audit intersect
43

38. Where ethics, integrity, compliance & audit intersect
44

39. Where ethics, integrity, compliance & audit intersect
45

40. Where ethics, integrity, compliance & audit intersect
46

41. Where ethics, integrity, compliance & audit intersect
47

42. Saturday,
May 17, 2024
Where ethics, integrity, compliance & audit intersect
48

43. Where ethics, integrity, compliance & audit intersect
49

44. Why do intelligent people stare
right into the face of ethics –
and then do
the wrong thing anyway?
Again - I Keep Wondering…
Where ethics, integrity, compliance & audit intersect
50

45. Manipulation of
Non-Financial Results
The Slippery Slope
Where ethics, integrity, compliance & audit intersect
51

46. Non-financial
results
✓ Environmental impact
Where ethics, integrity, compliance & audit intersect
52

47. Non-financial
results
✓ Environmental impact
✓ Customer trends and volumes
Where ethics, integrity, compliance & audit intersect
53

48. Non-financial
results
✓ Environmental impact
✓ Customer trends and volumes
✓ Safety of self-driving vehicles
Where ethics, integrity, compliance & audit intersect
54

49. Non-financial
results
✓ Environmental impact
✓ Customer trends and volumes
✓ Safety of self-driving vehicles
✓ Harassment and discrimination
Where ethics, integrity, compliance & audit intersect
55

50. Non-financial
results
✓ Environmental impact
✓ Customer trends and volumes
✓ Safety of self-driving vehicles
✓ Harassment and discrimination
✓ Misuse of technology
Where ethics, integrity, compliance & audit intersect
56

51. Non-financial
results
✓ Environmental impact
✓ Customer trends and volumes
✓ Safety of self-driving vehicles
✓ Harassment and discrimination
✓ Misuse of technology
✓ Personal and data privacy
Where ethics, integrity, compliance & audit intersect
57

52. Non-financial
results
✓ Environmental impact
✓ Customer trends and volumes
✓ Safety of self-driving vehicles
✓ Harassment and discrimination
✓ Misuse of technology
✓ Personal and data privacy
✓ ESG compliance reporting
Where ethics, integrity, compliance & audit intersect
58

53. A few ethics
concerns
✓ Shading the truth – ignoring the truth
✓ Rationalization of pretty much everything
✓ Back-room shadow deals
✓ Leadership integrity erosion
✓ International conflict +/- domestic conflict
Where ethics, integrity, compliance & audit intersect
60

54. A few ethics
concerns
✓ Shading the truth – ignoring the truth
✓ Rationalization of pretty much everything
✓ Back-room shadow deals
✓ Leadership integrity erosion
✓ International conflict +/- domestic conflict
✓ AI-based decisions & deception
Where ethics, integrity, compliance & audit intersect
61

55. Artificial Intelligence & Algorithms
Where ethics, integrity, compliance & audit intersect
62

56. Where ethics, integrity, compliance & audit intersect
63

57. FUNDAMENTAL QUESTION
But is there
anything really new
to discuss?
Where ethics, integrity, compliance & audit intersect
64

58. A few ethics
concerns
✓ Shading the truth – ignoring the truth
✓ Rationalization of pretty much everything
✓ Back-room shadow deals
✓ Leadership integrity erosion
✓ International conflict +/- domestic conflict
✓ AI-based decisions & deception
✓ Growing uncertainty and anxiety
Where ethics, integrity, compliance & audit intersect
65

59. Uncertainty
causes
anxiety
Where ethics, integrity, compliance & audit intersect
66

60. Where ethics, integrity, compliance & audit intersect
67

61. 1. Starting Point
2. So…Where are We Now
3. Let’s Play Better, Worse or the Same
4. The Slippery Slope of Integrity Erosion
5. So…Where Does That Leave Us?
6. Your Questions
Agenda
Where ethics, integrity, compliance & audit intersect
68

62. 1. Starting Point
2. So…Where are We Now
3. Let’s Play Better, Worse or the Same
4. The Slippery Slope of Integrity Erosion
5. So…Where Does That Leave Us?
6. Your Questions
Agenda
Where ethics, integrity, compliance & audit intersect
75

63. Hey, Let’s Jump Off the Cliff
Where ethics, integrity, compliance & audit intersect
76

64. Creeping
Normalcy
BEWARE
Where ethics, integrity, compliance & audit intersect
77

65. The Slippery Slope
Unethical
(Dishonest)
Ethical
(Honest)
Where ethics, integrity, compliance & audit intersect
78

66. Well…
It Depends
The Slippery Slope
Unethical
(Dishonest)
Ethical
(Honest)
Where ethics, integrity, compliance & audit intersect
79

67. Well…
It Depends
The Slippery Slope
Unethical
(Dishonest)
Ethical
(Honest)
Where ethics, integrity, compliance & audit intersect
80

68. Well…
It Depends
The Slippery Slope
Unethical
(Dishonest)
Ethical
(Honest)
Where ethics, integrity, compliance & audit intersect
81

69. Ethical
(Honest)
Unethical
(Dishonest)
The Slippery Slope
Where ethics, integrity, compliance & audit intersect
82

70. ✓ Governance
✓ Policies
✓ Internal Controls
✓ Tone ‘In The Middle'
✓ Micro Culture
✓ Audit
Ethical
(Honest)
Unethical
(Dishonest)
The Slippery Slope
Where ethics, integrity, compliance & audit intersect
83

71. 1. Starting Point
2. So…Where are We Now
3. Let’s Play Better, Worse or the Same
4. The Slippery Slope of Integrity Erosion
5. So…Where Does That Leave Us?
6. Your Questions
Agenda
Where ethics, integrity, compliance & audit intersect
84

72. A Risky Topic?
Potential Career & Personal Risk
Where ethics, integrity, compliance & audit intersect
85

73. What’s
our role?
THE BIG QUESTION
Where ethics, integrity, compliance & audit intersect
86

74. What’s
your role?
THE LARGER QUESTION
Where ethics, integrity, compliance & audit intersect
87

75. Out on a Limb???
Where ethics, integrity, compliance & audit intersect
88

76. Potential
roles
1. Deterrence
Where ethics, integrity, compliance & audit intersect
89

77. Potential
roles
1. Deterrence
2. Monitoring, analysis & verification
Where ethics, integrity, compliance & audit intersect
90

78. Monitoring,
analysis &
verification
suggestions
• Include ethics issues in risk analysis
Where ethics, integrity, compliance & audit intersect
91

79. Monitoring,
analysis &
verification
suggestions
• Include ethics issues in risk analysis
• Include ethics issues in project planning
92 Where ethics, integrity, compliance & audit intersect

80. Monitoring,
analysis &
verification
suggestions
• Include ethics issues in risk analysis
• Include ethics issues in project planning
• Critical thinking & skepticism
93 Where ethics, integrity, compliance & audit intersect

81. Monitoring,
analysis &
verification
suggestions
• Include ethics issues in risk analysis
• Include ethics issues in project planning
• Critical thinking & skepticism
• Be visible and vocal
94 Where ethics, integrity, compliance & audit intersect

82. Monitoring,
analysis &
verification
suggestions
• Include ethics issues in risk analysis
• Include ethics issues in project planning
• Critical thinking & skepticism
• Be visible and vocal
• Tell success stories
95 Where ethics, integrity, compliance & audit intersect

83. Monitoring,
analysis &
verification
suggestions
• Include ethics issues in risk analysis
• Include ethics issues in project planning
• Critical thinking & skepticism
• Be visible and vocal
• Tell success stories
• Recruit heroes
Where ethics, integrity, compliance & audit intersect
96

84. Potential
roles
1. Deterrence
2. Monitoring, analysis & verification
3. Field reality examiner / auditor
Where ethics, integrity, compliance & audit intersect
97

85. 98
Audit Interviews
Where ethics, integrity, compliance & audit intersect

86. Ask About Problems
Where ethics, integrity, compliance & audit intersect
99

87. Good questions “Have you seen anything that made you
uncomfortable?”
100 Where ethics, integrity, compliance & audit intersect

88. Good questions “Have you seen anything that made you
uncomfortable?”
“Have you been asked to sign or approve
anything that you weren’t confident was
correct?”
101 Where ethics, integrity, compliance & audit intersect

89. Good questions “Have you seen anything that made you
uncomfortable?”
“Have you been asked to sign or approve
anything that you weren’t confident was
correct?”
“Is anyone breaking the rules?”
102 Where ethics, integrity, compliance & audit intersect

90. Good questions “Have you seen anything that made you
uncomfortable?”
“Have you been asked to sign or approve
anything that you weren’t confident was
correct?”
“Is anyone breaking the rules?”
=====
“Tell me what happened.”
103 Where ethics, integrity, compliance & audit intersect

91. Good questions “Have you seen anything that made you
uncomfortable?”
“Have you been asked to sign or approve
anything that you weren’t confident was
correct?”
“Is anyone breaking the rules?”
=====
“Tell me what happened.”
=====
“How could we prove that?”
104 Where ethics, integrity, compliance & audit intersect

92. Good questions “Have you seen anything that made you
uncomfortable?”
“Have you been asked to sign or approve
anything that you weren’t confident was
correct?”
“Is anyone breaking the rules?”
=====
“Tell me what happened.”
=====
“How could we prove that?”
105 Where ethics, integrity, compliance & audit intersect

93. Potential
roles
1. Deterrence
2. Monitoring, analysis & verification
3. Field reality examiner / auditor
4. Radar / early warning system
Where ethics, integrity, compliance & audit intersect
107

94. Potential
roles
1. Deterrence
2. Monitoring, analysis & verification
3. Field reality examiner / auditor
4. Radar / early warning system
5. Stop sign
Where ethics, integrity, compliance & audit intersect
108

95. Potential
roles
1. Deterrence
2. Monitoring, analysis & verification
3. Field reality examiner / auditor
4. Radar / early warning system
5. Stop sign
6. Conscience
Where ethics, integrity, compliance & audit intersect
109

96. How does a person
systematically analyze situations
to make clear and correct
ethical decisions?
- page 2
Where ethics, integrity, compliance & audit intersect
110

97. How does a person
systematically analyze situations
to make clear and correct
ethical decisions?
- page 2
Degrees of Separation
Where ethics, integrity, compliance & audit intersect
111

98. Potential
roles
1. Deterrence
2. Monitoring, analysis & verification
3. Field reality examiner / auditor
4. Radar / early warning system
5. Stop sign
6. Conscience
7. Advisor
Where ethics, integrity, compliance & audit intersect
112

99. Potential
roles
1. Deterrence
2. Monitoring, analysis & verification
3. Field reality examiner / auditor
4. Radar / early warning system
5. Stop sign
6. Conscience
7. Advisor
8. Preacher Teacher
Where ethics, integrity, compliance & audit intersect
113

100. Preacher Teacher
Where ethics, integrity, compliance & audit intersect
114

101. Ask About Solutions
Where ethics, integrity, compliance & audit intersect
115

102. Employee
ethics training
scenarios
W W Y D N
(What Would You Do Next?)
Where ethics, integrity, compliance & audit intersect
116

103. Tell Them Solutions?????
Where ethics, integrity, compliance & audit intersect
117

104. “What if we…”
Pivot to Solutions
Where ethics, integrity, compliance & audit intersect
118

105. “What if we…”
Pivot to Solutions
Where ethics, integrity, compliance & audit intersect
119

106. 1. Starting Point
2. So…Where are We Now
3. Let’s Play Better, Worse or the Same
4. The Slippery Slope of Integrity Erosion
5. So…Where Does That Leave Us?
6. Your Questions
Agenda
Where ethics, integrity, compliance & audit intersect
120

107. Visit www.TeamMateSolutions.com
for the latest in Internal Audit thought leadership and more.
See more webinars from TeamMate at tm.wolterskluwer.com/webinars
Your questions, comments, feedback,
well-reasoned and/or emotional arguments,
confessions or anything else?
www.JohnHallSpeaker.com/contact/
121

108. Visit www.TeamMateSolutions.com
for the latest in Internal Audit thought leadership and more.
See more webinars from TeamMate at tm.wolterskluwer.com/webinars
Thank you!
122