Analysis of Ethical Dilemma of External Certified COR Auditors

The final assignment will make up 20% of the total course grade

Your assignment should be submitted using the Assignments link above.

The following scoring rubric will be used to provide you with feedback regarding your assignment:

This final assignment requires you to consider the ethical dilemma described below and provide an analysis of the situation and offer advice as to what response is ideal. There are a number of questions to answer in your response. Take the time to read the questions and organize your response.

Please write in the first person (not the third person). Consider the information presented in the Assignment Grading Rubric as a guide. Spelling, grammar and the general need to be analytical and logical all contribute to the assessment of your assignment. Your ability to convey your ideas in a clear, concise and thoughtful manner is being assessed in this assignment.

Your report must be written and submitted in Word.doc format, single spaced, Arial 11 point font. (Note: For Mac users using the ‘Pages’ app, to export as Word, choose File > Export to > Word). The entire report should not exceed two full pages including any references listed. Use the header to indicate your name, your personal email address, the course number and the date. The details of the assignment are described below.

A Certificate of Recognition (COR) is awarded to employers who develop health and safety programs that meet established provincial standards. A COR shows that the employer’s health and safety management system has been evaluated by an external certified auditor and meets provincial standards. These standards are established by the Occupational Health and Safety (OHS) authority.

To get a COR your business must first have a health and safety management system in place, and then have it successfully audited through a Certifying Partner. External audits have to be completed every three years. Examples of certifying partners include the construction safety association and the transportation safety association in your province. There are many different certifying partners in most provinces.

The Certifying Partner is the organization that can help you develop your health and safety system, provide health and safety training and support services, coordinate your COR audit process and provides certification to the auditor and quality assurance review of the external audit of your health and safety system. Typically a person in the company, often a safety practitioner, takes a leadership role to work with the Certifying Partner to develop and implement the health and safety system and arrange for the external COR audit.

The Ethical Dilemma of External Certified COR Auditors

If your company passes the external audit, the Certifying Partner will jointly issue your company a COR. COR recipients are eligible to earn a financial incentive through the WCB/WSIB. Employers who reduce their claim costs below predicted targets and achieve a COR can earn up to 20% off their industry WCB/WSIB rate. For many employers rebates can be over $100,000 per year and once the COR is obtained the rebates continues for three years at which time a further external qualifying COR audit must be completed. The financial incentives for holding COR can be significant.

External certified auditors conduct COR audits. They are typically hired by the person in the company that manages the health and safety system. Typically the people doing these audits are private health and safety consultants working for themselves or they are health and safety practitioners working as an employee of a privately owned company. They are paid a fee for completing the COR audit in accordance with the Certifying Partners audit protocol and they are required to meet the quality assurance review of the Certifying Partner. The fees they charge can be in excess of $1,000/day plus expenses and a typical COR audit can take anywhere from 10-20 days to complete. An external COR auditor can enjoy a good standard of living and if they establish a good relationship with a strong client base that hires them back every three years to repeat their external COR audit they can earn lots of money.

External certified auditors must follow a Code of Ethical Conduct similar to the Board of Canadian Registered Safety Professionals (BCRSP) Rules of Professional Conduct. A copy of the BCRSP Rules of Professional Conduct is attached:

External auditors are typically hired by the person in the company to be audited who has been taking the leadership role to develop and implement the occupational health and safety system. The hired external certified auditors are required to objectively evaluate the company’s occupational health and safety management system.

Regardless of how the auditor scores the company on the audit their work is subject to the Certifying Partner’s quality assurance review. If the auditor scores the company “easily” the company will obtain an increasingly high audit score and hold COR. The company will appreciate the “good work” of the auditor. The company will earn the generous WCB rebate every year and will be pleased to hire the auditor back every three years. If the auditor scores the company too “tough” the company could end up with a lower audit score or lose their COR altogether if they score below the COR audit pass score. A lower score or a failed audit could create difficulties for the person in the company that hired the auditor. If the auditor evaluates the company health and safety system and scores the audit below the audit pass score, the company will lose the significant WCB rebate. In this scenario it is unlikely the external certified auditor will be ever hired back to conduct any future audits for this company.

Given this scenario it has been stated by many that the external certified auditor is in a perpetual and real conflict of interest. Further if it can be argued that if there is no real conflict of interest there is at least a perceived conflict of interest.

Consider the Rules of Professional Conduct for Canadian Registered Safety Professionals that is attached ( BCRSP Rules of Professional Conduct.pdf) what do you think about this situation.

1. How are these two people (the external auditor and the company representative) supposed to be able to do their work and still meet the general requirements of “ethical behaviour” expected of all safety practitioners?
2. If the external auditor or the company representative is also a CRSP they will be bound by the BCRSP Rules of Professional Conduct. Is it possible for the external auditor and the company representative to do their work considering the overall requirements imposed in the “rules document” on a CRSP?

With particular reference to the BCRSP Rules of Professional Conduct, under Section 2, “Integrity” both professionals (the external certified auditor and the company representative) are to do the following:

Avoid circumstances where compromise of professional conduct or conflict of interest may arise.

Do you think in doing this audit work they are “avoiding circumstances where compromise of professional conduct or conflict of interest may arise”?

Do you think the auditor or the company representative are in conflict of interest? If “no” why so? If “yes” do you think the conflict is real or just perceived.

If you have any questions, please email the instructor through the Email icon of the navigation bar above. Thank you.