By AAT Comment EthicsHow to be an ethical accountant in a connected world17 Oct 2022 Technology, digital accounting and new ways of working create new ethical challenges. Are you keeping up with the pace of change? In January this year, umbrella payroll company Parasol Group temporarily shut down part of its service after it identified unauthorised activity from an ‘online intruder’. The incident caused major concern not only for the firm – but also for those businesses using its services. The company’s MyParasol portal, through which timesheets are submitted, suffered a multi-day outage, with company CEO Doug Crawford emailing customers to explain the “root cause” of the issue was “malicious activity on our network”. Help AAT improve ethical guidanceAAT is conducting a major review its Code of Ethics. This is your chance to tell us what you think of our resources and what would help you in your working life.Email the teamPrivacy is an ethical issueBut cases like this are not just a cyber security concern. They are not even just operational nightmares to be overcome. They are also an ethical issue.As one party posted concerning the Parasol outage: “If it is a cyber attack wouldn’t it be good to let us know so we can take the necessary measure to protect our personal information?”Such incidents demonstrate the growing complexity of ethics and accountants’ responsibilities when it comes to behaving ethically. The days of ‘ethical behaviour’ broadly being about avoiding pressure from bosses or clients to misrepresent tax returns are long gone. Today, ethics is far more complex – and far more wide-reaching. Are the digital systems and technologies you rely on ethical – or are they jeopardising your clients’ data and personal information? Are the ‘decisions’ that technology is making appropriate and accurate – or do they risk creating errors? Are they facilitating or creating opportunities for fraudsters, unethical individuals, and firms? While tech-driven automated services have the power to deliver great efficiency and to streamline business processes considerably, it is clear they also bring a far greater challenge when it comes to ethics – leading many organisations, including AAT, to issue guidance around the risks of managing data and ethical issues in the digital world. Technology and ethics While new technologies have been helpful, giving rise to new ways of working – Trudy Bray, founder of Steer Accountancy, confirms “going paperless has been better for business” overall – they have also created new pressures and challenges. The Cambridge Analytica scandal, and reported bias in recruitment and financial services algorithms and models, are two examples of ethical breaches that have undermined trust in businesses and caused real-world harm. With accounting processes increasingly facilitated by digital tools and systems – cloud computing, AI, robotics, and big data mean businesses can respond more quickly and cheaply than before – it’s now more complex to maintain human control and make sure decisions can be explained. Tech is capable, but only humans are accountableHowever, human accountability is imperative to promote and maintain trust in a business and avoid potential harm. Data breaches and personal data being stolen, or sold without consent, can harm a firm’s reputation, for example – especially after a business has tried to deny or cover it up. Maintaining human accountability in digital processes is important for Bray. She and her staff manually check what their software has done rather than assuming all is well. “Obviously, you can’t always check every item of data,” she notes. “But you still need to do some checks.” It makes sense: suppose a firm were to use, say, a financial algorithm to make decisions normally made by qualified and regulated professionals – who should ultimately be accountable for the decision the algorithm has made? What checks are happening to ensure the decision is the best or correct one, or that the data or decision is free from bias or manipulation? How will it be viewed by customers or users? The lines may blur at the bleeding edgeIt can be difficult to rely on regulation where innovation and technological changes are happening quickly, and where there’s no past example to fall back on.And with ethics being so context-specific, a blanket ‘one-size-fits-all’ approach is not always helpful, and cannot be easily regulated for. Additionally, ethical business behaviour is generally not driven by compliance, but based in an organisation’s culture. Banking exampleFor example, Steer Accountancy’s website lists Bray as responsible for its privacy policy, and sets out how personal data will be stored and used. Clients were concerned at first by the feeds that were set up between their bank and her firm when she put them in place. “Some clients worried I could get into their bank accounts,” Bray notes. “So I had to reassure them that all the bank feeds did was feed the data from their bank accounts into our firm’s software – I had no access to their actual bank accounts.”Solution Bray’s solution was to be completely transparent with her clients about how the system worked, what she could (and could not) access, and how data was used. Clients have to authorise their banks to feed the figures securely into her firm’s systems. “I show them what I use, and they can see what I see – I show them what my system does and how we will both benefit from it,” she says. “I’ve used software in the past that caused problems, but when I implemented new digital systems, I tested processes on a few clients first before bringing it in, as well as testing it on myself, then asked for feedback.” Making ethics front and centreAs the world evolves rapidly, staying ethical requires constant maintenance and focus. It cannot be considered an add-on; it must be fundamental to how businesses and individuals operate daily.AAT is about to embark on a major review its Code of Ethics to ensure that members are fully supported in this area – details below. We are keen to know what you think and need, so do get in touch to share your views.AAT reviews its ethical codeIn 2022/23 AAT will undertake a full review of the AAT Code of Ethics, including all supplementary guidance. AAT’s current Code of Ethics and all supplementary guidance can be found by visiting aat.org.uk/membership/standards-requirements/professional-ethics Why is this happening? It is vital that the Code is a living document that members can interact with easily as part of their everyday professional lives, not just a reference document when problems arise. Can members help? AAT wants to hear members’ feedback and comments. Tell us what you think about the content, relevance, guidance and usability. Share your views with us at [email protected] by the end of October 2022. AAT Comment offers news and opinion on the world of business and finance from the Association of Accounting Technicians.