“In their own words”…Identifying an ethical dilemma

In the following extract from the ICAS research publication “Speak up? Listen up? Whistleblow? In their own words – Insights into the ethical dilemmas of ICAS members” we hear from ICAS members about their real-life experiences of ethical challenges, “In their own words”.

"I was explaining to my daughter I was going to be having a call with you tonight talking about ethics and, you know, that it’s something that ICAS are really focused on to say, ‘We want people who have got that qualification to be known for their high standard of ethics’. And she was saying, ‘Oh, that’s quite interesting, because that is really important, it’s important to you Mum, isn’t it?’  And I said, ‘Completely’. I said, ‘I think one of the worst things I could imagine is somebody questioning my professional ethics’." (Extract from interview with Abigail)

4.1 Identifying an ethical dilemma

For Jacob, the starting point in any discussion of ethics is that accountants “need to recognise that they have an ethical dilemma”. Interviewees distinguished ethical from other dilemmas in a number of ways. Some felt that there is a dividing line between a technical and an ethical issue, even if that line can be quite difficult to discern. Sam noted that ethical issues are “broader than simply technical ones”. Bruce saw some overlap between ethics and risk, saying “I sometimes find it difficult to separate risk and ethics because if there is a risk there is probably an ethical aspect to it”.

Other interviewees distinguished unethical from criminal activity. Daniel said that the issues he had come across in his career were not criminal, rather they were occasions where people “were probably taking things a bit too far, it’s maybe more stretching what you think’s reasonable in terms of professional ethics”. Logan described one situation, involving some disclosures that he considered to be required, where others disagreed, as concerning how to apply laws and rules rather than something ethical:

"It wasn’t an ethical one, it was just learning and using relationships to deliver the end point and the end point was the disclosure had to be made and…, once the lawyers got a hold of it there was no ambiguity whatsoever, it was ‘of course it has to be’ and lawyers just jumped at it and said ‘do it’."

4.2 The inevitability of encountering an ethical dilemma

Interviewees recounted a wide range of dilemmas. In their opinion, it was likely that ICAS members would encounter ethical dilemmas throughout their career. In Adam’s words:

"Anyone who is a chartered accountant active in business and believes that ethical questions won’t arise or ethical questions can be trained away, I would have to say there is a degree of naivety in that."

In Sam’s view “there are always ethical issues that arise from time to time”. He reflected that he did not really see the value of ethics learning during his training:

"It’s such a technical qualification with 99.9% of what you’re taught is weighted to your technical acumen. That’s the way I remember it. It’s probably not as much as that! But yes I remember going through the ethics module when I was going through my studies and thinking, or not thinking, just reflecting, on the fact that this is not accounting."

However, over the years, his view has changed:

"It clearly is part of the qualification, the brand, and it’s come to mean a lot to me over the last 20 years post qualification."

A number of interviewees felt strongly that the current business and corporate cultures were unhelpful and led to a climate in which ethics breaches were all too common. Henry was critical of the regulatory system, saying “the regulators effectively are toothless, especially in the face of the big corporates, particularly the banks.” He referred to examples such as salaries being “out of control”, “short-termism”, in essence “the perfect storm of how not to do it”. A lot of Henry’s work is with small and medium-sized firms and he was particularly concerned that some such businesses were losing trust in banks, especially where they were faced with high bank charges. He would therefore like accountants to do more to bring such matters to public attention, arguing that accountants “have a responsibility to society to ensure these things that we see in the press don’t happen”.

The nature and range of dilemmas encountered by interviewees varied widely. Some recalled only one, others two or three. The largest number was recalled by Matthew. During his career, he had focused on taking on interim positions, often turnaround cases, and hence had experience of working at a larger number of firms than most of the other interviewees. As he put it “my career has not necessarily been representative because I have been dealing with some troubled companies”. The 34 situations he had listed ranged from criminality including dishonesty, fraud and probable bribery, to directors acting in their personal interest, reporting and control issues, and issues of trust.

Prior to the interview, he had analysed these and said “out of 34 difficult events, I’ve ignored twelve of them, I’ve reported thirteen, I’ve taken action on five and I’ve quit” in the four remaining cases. To illustrate the range of responses, he explained a situation where he took no action as he had suspicions but no evidence to take things further, situations where he had reported criminal behaviour to various relevant authorities, others where he had reported to banks, and instances where he had been able to speak with people in the organisation to effect change. He believed that the type of role he held meant that he was likely to be in situations where there could be dilemmas but he also felt that being in interim roles gave him the scope to speak up in ways that might have been more difficult had he been in a full-time role, as the following extract, when discussing one role, shows:

"I think one question you could challenge me with though, I think Catriona, is that had I been – I was interim Finance Director there, and I was there for probably six or eight months – had I been a Finance Director down there on a full time contract, and had I had three children at fee paying schools, and a big mortgage round my neck, would I have dealt with it the same way? And you see I don’t quite know the answer to that. I think I would have been slower off the mark. So, my interim position, I’ve always felt gives me more independence because I’m not dependent on any one company, even though I am at the company and working hard for them. It has given me a sense of independence."

Two interviewees mentioned incidents that had occurred during their training days and some interviewees referred to incidences that had taken place in their retirement, for example when engaged in non-executive roles, as well as others that occurred during their main career period. However, most of the experiences reported in this monograph occurred during the post-qualification working lives of the interviewees.

In a series of extracts from the research hear from ICAS members about the real-life situations they have faced -  “In their own words”.

Hear more about the key findings from the author of the research Catriona Paisey, Professor of Accounting, University of Glasgow

Hear more about the key recommendations from the author of the research Catriona Paisey, Professor of Accounting, University of Glasgow

Hear from Norman Murray, Past President of ICAS and Past Chair of the ICAS Ethics Board

Hear from James Barbour, ICAS Director, Policy Leadership