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Ethics under pressure in UK finance teams

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28th Jul 2015
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UK finance managers are coming under pressure to compromise their ethical standards, according to a global survey of management accountants.

Responding to a CIMA poll, 30% of UK-based respondents said they had experienced such pressure, well up on the figures reported when a similar survey was conducted in 2012.

“There have continued to be high-level cases of ethical transgressions since 2012,” noted CIMA’s Managing Responsible Business 2015 report. Examples ranged from continuing scandals in London’s financial services sector to investigations into FIFA, and the Rana Plaza garment factory disaster in Bangladesh in 2013. In the US, meanwhile, record fines are being enforced under the US Foreign Corrupt Practices Act (FCPA).

“Corrupt corporate activities and the fallout from human rights abuses not only make headline news but also have a long-term impact on the company and the communities in which it operates,” the report stated.

The main pressures affecting management accountants’ ethical conduct in the UK occurred when they were working with colleagues from different functional areas within the organisation (20%) and when facing reporting deadlines. The activities most likely to be affected related to information integrity when compiling the accounts, reporting performance to external stakeholders and awarding contracts to suppliers.

“Many finance professionals are facing pressure to condone poor practice of their colleagues or to behave unethically themselves. The report highlights that we are still struggling to work our way through a crisis of culture within business, and we need to maintain our focus. Our study shows that we can no longer afford to think of ethical performance in business as just a compliance issue,” commented Tanya Barman, Head of Ethics at CIMA.

Much of the report is given over to discussing how to embed an ethical culture within organisations, and the role collecting and managing ethical information can play to achieve that end.

Although nine out of 10 of the organisations surveyed had ethical policies in place, only 36% collected ethical management information that enables them to assess and address risk. “There is a gap in implementation that needs filling,” the report concluded.

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By Scriptic
28th Jul 2015 19:49

Give it Time

We don't yet know who in Tesco compromised themselves by mis-stating profits and (presumably) committing a criminal act by deliberately misleading the auditors but it is reasonable to expect that once the courts have passed judgement on these matters, the chances of others compromising ethical standards will be greatly reduced.

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