Accountants are frontrunners for maintaining an honest culture across the companies they work in.
A new AAT study of 2,000 people into the morals and ethics of many common vocations in the UK found bankers, politicians and footballers to be the least trusted, while accountants ranked alongside doctors, firemen and nurses in the top ten most trustworthy careers.
Unique to accountancy careers, however, is the expectation that practitioners have an inherent obligation to forensically investigate the finances of a firm, or rather a professional scepticism which provides the checks and balances to a company’s actions to make sure they comply with their industry’s ethics and regulations.
This quality was seemingly absent earlier this year when Britain’s leading retailer Tesco was found to have overestimated its half-year profits by £263m, wiping £2bn off its market value.
[dropshadowbox align=”right” effect=”lifted-both” width=”250px” height=”” background_color=”#ffffff” border_width=”1″ border_color=”#dddddd” ]To maintain strong professional ethics, accountants must aim to ensure:
- Integrity – honesty in all professional and business relationships.
- Objectivity – abandon any bias or conflict of interest in business judgments.
- Professional competence – act diligently and in accordance with applicable technical and professional standards when providing professional services
- Confidentiality – resisting the disclosure of sensitive company information to third parties.
Highlighting some of the day-to-day difficulties accountants can face at large corporations, it has been reported a small group of Tesco’s staff provided misleading information to auditors PwC, such as unsubstantiated corporate expenses, distorting attempts to verify accounts.
Had the decade-long relationship between PwC and Tesco become too cosy? Either way, both parties dropped the ball.
Whether it’s from bosses, shareholders or staff, most companies face intense pressure each day to make money and maintain profitable relationships, leading some to do the wrong thing to achieve that target.
Particularly at times of struggle, some accountants feel pushed into altering financial results through “aggressive” accounting, artificially boosting the financial performance of their firms.But as the Tesco case illustrates, such unethical behaviour sooner-or-later becomes identified and has incredibly damaging consequences on the reputation of their business.
The AAT survey shows how professions with strong ethics are more trusted than others, with more than 80% of respondents admitting strong ethics and standards should be a crucial component for a business. Furthermore, an overwhelming majority (82%) said that they would stop buying a product or service from a company that was found to be unethical or had staff willing to break the law or rules in order to make profit.
The onus is on accountants to think independently about the ethical considerations in each of their decisions, as guidelines do not provide an exact solution to every problem, but function as an aid to the decision-making process.
Ben Walker is the former editor of Accounting Technician.