Auditing

Section 301.4 of the Sarbanes-Oxley Act requires audit committees to establish procedures for receiving and handling complaints related to "accounting, internal accounting controls, or auditing matters; and the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters."To meet these requirements, an organization can develop a whistle-blower program. In addition to improving procedural responses to complaints, it can improve an organization's internal communication and its ability to understand concerns and trends before they become crises, and enhance its systems of internal controls. While the specific characteristics of whistle-blower programs have slight anomalies to accommodate an organization's unique DNA, all that prove effective are genetically similar, share common elements, and utilize internal auditors throughout the development and deployment phases.

2- ) Use the Internet to conduct research related to whistleblower processes. Prepare a report summarizing key characteristics for the operation of an effective corporate whistleblower hotline. Be sure to highlight potential pitfalls that should be avoided.

If effectively implemented, a whistleblower program can be a key defense against management override of internal control for purposes of engaging in fraud. According to survey results of the Association of Certified Fraud Examiners, almost 40 percent of frauds are detected through tips.

The AICPA's