What the E……..Ethics!!!

We have all heard about scams these days at leading companies and banks, and almost instantly one thing that comes to our mind is how this is even possible? Aren’t these companies getting checked by Auditors? Aren’t these companies’ financials being reviewed by credit rating agencies? What about the valuations that some of the leading consultancy firms have put in only to find that the company is absolutely hollow.

The answer to all of this is unfortunately not straight forward and may not even be common. However there is one thing common about all the perpetrators of these frauds, they were low on ETHICS!

Ethics is doing the RIGHT thing even when No One is watching. This becomes almost a blanket answer to why we are seeing such heightened amount of scams and frauds and liquidations, etc. The ethics which a lot of leading academic institutions like ACCA and CFA put it at the centre of their syllabus, is still unfortunately missing from the corporate world.

Its always easy to blame the Accountants, the Auditors, the Management, however it is almost impossible that people can get away with such fraudulent activities despite a full ecosystem in place to check on such activities. Therefore trough this article we are only going to reiterate what already is has been said a million times, be ETHICAL.

Now how do you do that? International Federation of Accountants have adopted a very simple and short list of ethics that needs to be followed by their accountants. These are very simple ethical requirements, however in changing times of today it may sometimes become difficult to adopt and implements such ethical behaviour. So lets start with one of the first things that is extremely important for Ethics i.e. Integrity.

Integrity: Integrity simply put is being honest. If you have a client that is involved in illegal activities, don’t get involved yourselves. It could be anything; under declaring income, over submitting of expenses, etc. and as accountants we may become privy to all this information. Therefore in such instances explain to your client the penalties and fines they would end up paying if caught, and if they still don’t budge then seek legal advise from your professional body (e.g. ACCA helpline).

Objectivity: This is the quality of being unbiased and not changing views and outcomes when the person involved is close to you.  Therefore if your spouse is working on one of your clients then you should ask for your assignment to be changed as there’s bound to be biasness if you were to catch anything that wasn’t done correctly by your spouse. It could be that your spouse was involved in fraud, chances are you will look the other way and ignore it. The ethics though says that irrespective of the situation, you need to give fair view of the situation.

Professional Competence: A lot of the accountants today, or for that matter any professional are hounded by this question, am I the right person for this job? So there’s a common misconception that all chartered accountants are tax experts; actually that’s not the case. All the CA’s have to clear the tax exams to become qualified, however that may not mean they are experts or enjoy doing the tax work. Therefore if you’re not the expert, don’t take the work. As Ethics require you to be competent and technically strong and fit to do the work, therefore its ethical to humbly reject the work rather than taking on work and messing it. At the same time, people who want to do that job then needs to ensure they are well trained and keep up-to-date knowledge of all that’s latest to learn, new taxes, new laws, new standards, etc. Continuous Professional Development sessions (CPD) are the best way to do this and key requirement to continue to retain your membership.

Confidentiality: Much doesn’t have to be said here, if you’re working on any assignments, please ensure that the work is treated with utmost confidentiality. Maybe some piece of information may not mean nothing to you, however can mean a great deal to someone else. For e.g. you have the debtors details for reconciliation, don’t lose those papers or leave them around, because if that’s lost and reaches to the competitors, your clients may lose a great deal of business because competitor will start approaching them offering better rates. So if you’re working on any assignments treat them with full confidentiality and don’t go around in your family and friends circles discussing your work.

Professional Behaviour: It may seem very straight forward, but still is one of the most important ethical requirements. You need to exhibit all the qualities of a good professional when at work and off work as well. Therefore you can be the most professional at work, however you’re indulging in activities which are anti-social outside work, and this is not acceptable as well. So getting into fights, harassing people, etc. all leads to flouting of ethical requirement. Therefore always put up a good conduct as a professional.

So as you can see, once everyone from every profession starts to behave ethically, it is going to be a much better place to live in. The world with no frauds and people respecting each other can quite easily propel the mankind to the next level of development. So be ETHICAL!

 

About Author

Zaheer Sayed, is one of the oldest ACCA members in India having passed out ACCA exams in December 2007 from London. Has vast work experience of over 14 years, having worked with Ernst and Young in Stat Audits to working as Associate Director at the UBS Bank, has in-depth knowledge of finance and accounting world. On academics side, has been teaching for almost 10 years, with ACCA teaching experience of over 6 years specialising in Reporting, Tax and Audits. Has also co-authored over 20 titles for a leading publication house in Pune on varied topics like Economics, Audit, Accounting, etc.