Business Ethical Decision Making and Cases Seventh Edition

Business Ethical Decision Making and Cases, Seventh Edition O. C. Ferrell University of New Mexico John Fraedrich University of Wyoming Linda Ferrell For in-class note taking, choose Handouts or Notes Pages from the print options, with three slides per page. University of New Mexico Copyright © Houghton Mifflin Company 1

Chapter 9 Implementing and Auditing Ethics Programs Copyright © Houghton Mifflin Company 9 -2

The Ethics Audit • An ethics audit is a systematic evaluation of an organization’s ethics program and performance to determine whether it is effective. • Social auditing is the process of assessing and reporting a business’s performance in fulfilling the economic, legal, ethical, and philanthropic responsibilities expected of it by its stakeholders. Copyright © Houghton Mifflin Company 3

Requirements of the Ethics Audit • Secure top management commitment • A committee to oversee the audit • Define the scope, process, and subject matter of the audit • Review the firm’s mission, policies, goals, and objectives and define its ethical priorities • Collect and analyze relevant information • Verify the results • Report the findings Copyright © Houghton Mifflin Company 4

Benefits of Ethics Auditing • Ethical crisis management and recovery • Challenges of measuring non-financial performance • Risks and requirements in ethics auditing Copyright © Houghton Mifflin Company 5

The Strategic Importance of Ethics Auditing • The ethics audit, like the financial audit, should be conducted regularly rather than in response to problems involving or questions about a firm’s priorities and conduct. Copyright © Houghton Mifflin Company 6