CAs must uphold ethical standards to benefit society as a whole
“No-one would have believed…” The words at the beginning of the HG Wells sci-fi classic ‘The War of the Worlds’ are certainly something that resonate in the current environment. In the space of a few short weeks the world has changed drastically and indeed, perhaps, forever.
One thing that hasn’t changed, however, is the need for people to behave appropriately. Pictures of people flocking to popular public spaces, contrary to government guidance, has been rather disconcerting given the current COVID-19 outbreak, and certainly not in the public interest.
For the chartered accountant (CA) behaving appropriately means taking personal responsibility for ensuring adherence to the fundamental ethics principles which are enshrined in the ICAS Code of Ethics. The reputation of the profession – how CAs are perceived by the public – is defined by what they do, how they do it, and how they treat other people. There is a need for every individual CA to demonstrate the highest standards of professional behaviour and ethical standards to benefit society as a whole.
At a time when chartered accountants will be under considerable individual pressure, whether making major business decisions, providing advice to businesses in relation to available government funding, making professional judgements whilst preparing financial statements, e.g. determining levels of extended credit losses, and providing assurance on a range of subject matter information, the need for ethical behaviour could not be greater.
All Chartered accountants, regardless of their role or level of seniority, need to ensure that they demonstrate ethical leadership and comply with the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. By doing so, they can help ensure that decisions are made based on appropriate information/evidence.
When we do eventually return to normal, and we will, although of course it may be a new normal, there will be reviews into various aspects of the current situation, including the governments’ response. Whilst some of those will focus on the availability of key protective equipment, others will most likely look into the behaviour of business. Indeed, a likely key focus area will be the outcomes of the various business support packages that the government has put in place. Matters that may come under the spotlight include did the schemes work as intended, did any businesses abuse the schemes that were established, was misinformation provided etc.
Chartered accountants need to support their clients and employers, and manage the pressures being faced by firms or businesses they own, but this must not come at the extent of breaching any of the fundamental ethics principles. The right to whistle-blow in specific circumstances is of course contained in the application material that supports the fundamental principle of confidentiality in the ICAS Code of Ethics. The ability to prepare and provide reliable information by which appropriate business decisions, and funding allocated, can be made is an essential characteristic of the professional accountant.
If others are not behaving ethically then a CA cannot just stand by and watch it happen. It is recognised it can be difficult to take the ethical stance, but if a CA does nothing, they could be implicated in a scandal when the time comes to learn the lessons of this outbreak. The consequences of an inappropriate decision could be potentially ruinous for not only the individual CA, but also their organisation.
All members also have obligations under the Professional Conduct in Relation to Taxation (PCRT). As the PCRT states: Tax advisers operate in a complex business and financial environment and a core purpose of the tax system is to fund public services and to ensure the good health of our economy and society. Tax advisers therefore have a responsibility to serve their clients’ interests whilst upholding the profession’s reputation and the need to take account of the wider public interest. PCRT is intended to guide members in their behaviour, to assist them and to ensure that they undertake work effectively and appropriately.
Members also have obligations under Anti Money Laundering legislation to keep risk assessments under review and to make suspected offences reports where they have knowledge or suspicion, or reasonable grounds for suspicion, that money laundering is occurring. This may include where grants or assistance is being claimed when the business is not eligible, or conditions of eligibility are not being maintained.
For 165 years, members of ICAS have been contributing positively to society. CAs are employed because of the professionalism and values they encapsulate. During these uncertain times, many sizeable challenges will have to be faced and overcome. Chartered accountants may not generally be at the frontline of the battle against Covid-19 and we can only express our admiration for those courageous individuals who are.
That said, chartered accountants also need to play their part and exercise moral courage, as and when necessary, to ensure that we can seek to mitigate the economic, and ultimately human, consequences of the virus. By doing so, we can help to ensure that public trust in the accountancy profession is restored (justified).
As well as the ICAS Code of Ethics, as part of its The Power of One business ethics initiative, ICAS has published a number of ethics resources to support members. Search ‘Ethics and The Power of One’.
ICAS also offers an Ethics Helpline Service.