Review the engagement observation that follows and record the specific information that represents the recommendation and each of the following observation attributes: criteria, condition, cause, and effect.
Audit Observation and Recommendation:
Corporation X associates are required to abide by the organization's formal Code of Business Conduct & Ethics (the Code). To ensure all employees are aware of the Code and their obligations under it, Corporation X requires all associates to acknowledge receipt of the Code. A global email was sent to all associates on July 1 informing them of their obligation to read and acknowledge the Code. Associates were instructed to complete and return acknowledgments by December 1. Our audit testing indicated the following relative to the acknowledgment process:
■ As of March 1, fewer than 50 percent of associates had completed and returned acknowledgments.
■ Follow-up procedures have not been performed by human resources (HR) or department management to date.
■ There is not a formal policy indicating actions to be taken if and when associates do not return acknowledgments.
■ No disciplinary actions have been taken regarding associates who have not completed acknowledgments of the Code to date.
Improving the acknowledgment process will help Corporation X demonstrate compliance with external regulations requiring a Code of Ethics. It will also help to ensure all associates are aware of their responsibilities and obligations to the organization under the Code. We recommend management enhance the acknowledgement tracking process to ensure all associates acknowledge receipt of, compliance with, and understanding of the Code. Policy and procedures need to be developed and implemented to take appropriate action when associates do not respond. Disciplinary action should be taken if associates refuse to complete and return acknowledgments, as required by policy. Management Response: Associates who have not acknowledged the Code as of March 24 will be sent a reminder notification the week of April 3 informing them of the requirement to acknowledge the Code. A report of all associates who continue to be delinquent in acknowledging the Code will be provided to the applicable HR liaison for review and follow-up the week of April 17. The HR function will partner with the department business heads of delinquent associates to obtain the necessary acknowledgments. A final report will be generated the week of April 24 to determine the remaining associates who have not acknowledged the Code. A verbal warning will be issued to all associates who have not acknowledged the Code by April 24 and a written warning will be provided to associates who have not acknowledged the Code by April 30. Accountability: Jane Doe Responsibility: John Smith Implementation Date: March 24 Does the observation, as presented, adequately address all of the suggested observation attributes? If not, explain why.