Managing director CareersinAudit.com
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Ethical practices

25th Nov 2015
Managing director CareersinAudit.com
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After the corporate scandals of Enron and WorldCom rocked the business world, you’d think certain lessons would have been learned and that accountants would wear the ‘trusted adviser’ badge with pride, says Simon Wright, operations director at CareersinAudit.com.

Yet, recent research conducted by us shows the profession may have some way to go and unethical practices are still rife. 

Without doubt progress has been made to tighten professional standards. Here in the UK, there have been a spate of legislative measures  passed to mitigate risk and prevent another Enron happening.

Clearly not enough progress though, when you hear what’s happening at the coal face.

Nearly half of 1,700 accountants recently surveyed admitted they had either been pressurised (or knew of someone that had) by a manager or partner to ignore an adjustment that should have been made to a set of accounts. Not only that - four in 10 accountants are aware of a senior staff member within their organisation making a decision that deliberately chose a commercial result for the company or client, even though the decision could be unethical. 

The majority (53%) believe that senior staff members within their organisation do not appear to act independently from the commercial pressures faced by the business. Many also believe that to some degree those in the profession have helped their clients create a set of accounts that are deliberately misleading.

With so many in the profession’ in the know’ about dubious practices, why aren’t more being accountable and coming forward? Quite simply, whistleblowers are not being protected. Three quarters of the accountants revealed that if an employee reports the conduct of a colleague, their organisation does not do enough to protect against victimisation or dismissal. 

Member associations and institutes may have identified certain ethical principles as being of crucial importance to the profession – but how much of this is ethics tokenism? Simply identifying and articulating them is not enough. Organisations need to adopt values that will adhere to the principles and maintain the confidence of stakeholders.

Let’s see more organisations making sure they have a whistleblowing policy in place, so staff are not fearful of exposing unethical practices. Let’s also see more employers drawing up clearer ethical policies so those working in the company are crystal clear about what is ‘right’ and ‘acceptable’ and the penalty for breaching policies.

There is a school of thought which believes accountants tend to focus on the technical issues and perhaps lack ethical sensitivity to recognise ethical dilemmas involved with their work, which could ultimately lead to making wrong decisions.

It’s high time then, that those in the profession who have lost sight of their moral compass are trained or guided to identify the moral dimension of seemingly technical issues.

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