Ethics Gospel

Once upon a time, in India, there was a big hermitage of a sage in the valley of Himalayas. There were lots of cows, by milk of which alone the expenses of the hermitage were met. The milk was also consumed by the resident of the hermitage. One day a disciple came to the sage, the headman and his Guru to make a complaint. He expressed his doubt that somebody is mixing water in the milk of the hermitage regularly. How to curb the ill practice? asked the Guru. The disciple suggested that one person be employed who will monitor the milk to control the adulteration. Thus, one person was employed for the purpose.

After few days, the disciple came again to his Guru and said that since they have employed a person to keep a watch over the milk, there has been more mixing up of water than before. The Guru casually said to keep one more person to watch over the first. A few days later, there was a big blunder and many disciples came to the Guru to complain heavy adulteration in the milk. Moreover, along with water someone had also found a fish in the milk.

The Guru said that if you employ more and more people to monitor, the adulteration is bound to increase. Initially there were lesser number of people who had their share in the milk and therefore there was lesser water in the milk. When you had increased a person for monitoring, his share was also added which in turn increased the stress on the existing resources. When you employed the second person, the adulteration increased to such an extent that you have now a fish in the milk instead of cream.

The disciples humbly asked the Guru for a correct solution. The Guru said it was his mistake that he never made his disciples mindful enough to educate and rightfully guide their subordinate disciples. By making a few people mindful does not make the society free of ills but all should understand their duties. We have to change ourselves first to bring the changes in the society. Mahatma Gandhi once said that we should become the change we want to see.

The Guru said we should have capabilities to change the mind set of the people in the hermitage. We preferred the easy way of making a complaint instead of selecting hard way of making our subordinates mindful of ills of adulteration and benefits of caring cows to produce more milk.

The Management Accounting says no one should be made liable for inefficiencies of others. The Internal Auditor is made liable for inefficiencies of the Control Owners. Cost of Internal Audit is connected to extent of its testing and monitoring. When controls designed and exercised by the management are ineffective and IA places lesser reliance on it and increases the extent of testing and monitoring which inturn increases the cost. When IA over rely on effectiveness of controls it faces risk of not exercising due care and diligence for preventing control failures.

Self Control Assessment (SCA) technique in its current format too is not effective as Control Owners are made ready to the skills of monitoring instead the objective and the ethics. There are newer ways of reducing cost of monitoring but need is to go beyond the prevailing dominant designs in the industry. We must first find out how to balance our monitoring programme which does not involve duplication of efforts allocating the valuable resources incorrectly and thus increasing our cost of monitoring. Secondly, we should become more and more objective oriented to find out newer ways of creating deterrence at a lesser cost. What you think about Ethics Gospel like this?

Your application of Indian philosophy is better only when you draw correct analogy. Remember it's a rocket science and you need the escaping velocity to mitigate the effect of dominant forces of existing systems and mind sets. The problem is difficulty in drawing a correct analogy because adulteration is on and purity is gone. Now, draw an analogy to be able to better understand the presented case study and change your execution style hereon.