The IIA Code of Ethics states that integrity is fundamental and describes behaviors such as honesty and responsibility. In this scenario, being completely honest with operational management about unfavorable audit results exemplifies the principle of integrity.
The Institute of Internal Auditors (IIA) "Code of Ethics", which details the principles and expectations for the professional practice of internal auditing, including integrity as a key principle.

According to IIA standards, assigning an auditor to review an area where they previously had responsibilities may compromise objectivity. The best approach is for the auditor to abstain from participation in the audit of the collections unit to avoid any perceived conflicts.

The driver of fraud that is directly controllable by an organization is Opportunity. By designing and implementing strong internal controls, clearly defining roles and responsibilities, and conducting regular audits and reviews, an organization can significantly reduce the opportunities for fraud to occur within its environment.
Fraud Triangle theory and IIA guidance on fraud risk management.