Question

During an engagement involving the purchasing department, an internal auditor learned that one vendor rewarded buyers in proportion to the size of the orders received. What recommendation should the internal auditor make to reduce the likelihood of future acceptance of such rewards by the buyers?

A. Periodic review of buyer lifestyles.
B. A strong, written statement of management's commitment to organizational ethics.
C. A policy of identifying and reducing buyer situational pressures.
D. Establishing an employee counseling program.

Answer 1

The internal auditor should recommend establishing a strong, written statement of management's commitment to organizational ethics to reduce the likelihood of buyers accepting rewards from vendors.

Step-by-step explanation:

The internal auditor should make the recommendation to establish a strong, written statement of management's commitment to organizational ethics to reduce the likelihood of future acceptance of rewards by the buyers. This statement would clearly outline the company's ethical standards and expectations for all employees, including buyers. By emphasizing ethical behavior and the importance of maintaining the company's reputation, it would discourage buyers from accepting rewards that could compromise their integrity.

Additionally, the statement should be communicated to all employees and reinforced through training programs and regular reminders. This would help create a culture of ethics within the organization and reinforce the message that accepting rewards from vendors is not acceptable.

Overall, a strong, written statement of management's commitment to organizational ethics would provide clear guidance and expectations for buyers, reducing the likelihood of future acceptance of rewards and maintaining the integrity of the purchasing department.