Blog: Willful Subversion of Second Line of Defense Can Land You in Jail

In his blog, IIA President and CEO Richard Chambers, CIA, QIAL, CGAP, CCSA, CRMA, shares his personal reflections and insights on the internal audit profession. Here’s an excerpt from his latest post:

Among my earliest memories as an internal auditor was the constant refrain from officials in my organization that, as internal auditors, our job was to keep them “out of jail.” It was their light-hearted way of signaling how important we were to them. I didn’t take them too seriously, because I didn’t know of too many people who went to jail because of an internal control or compliance failure. But, as Bob Dylan so famously sang, “the times they are a-changin’!”

The recent guilty plea by a former drug company compliance officer on conspiracy and other charges is yet the latest example of when willful compliance failures can lead to jail time for executive management. The related arrest of a second company executive, the former CEO, shows that prosecutors are willing and able to reach high into the C-suite to send a message.

The stunning arrests of the former Rochester Drug Cooperative executives reflect the high stakes associated with certain kinds of control and compliance failures and, more specifically, the dangers of willfully ignoring them. Some have gone as far as characterizing this as a test case for federal authorities prosecuting drug company executives for trafficking narcotics.

Read the full InternalAuditor.org blog post from IIA President and CEO Richard Chambers.