Chartered Accountants must lead and champion the ICAS ethical values – the foundations for trust
Every Chartered Accountant must demonstrate the highest ethical standards to fulfil their profession’s duty to the public interest, writes Loree Gourley, Chair of the ICAS Ethics Board.
The coronavirus is first a health crisis of immense proportion. Every household in the UK has received a letter from the Prime Minister telling us to “stay at home, protect the NHS, and save lives”. Every individual must take personal responsibility for behaving appropriately. Every one of us has a duty to act in the public interest.
Second it is a global economic crisis which will require a revival where leaders across the ecosystem will need to be clearly rooted in a common purpose in the public interest which includes; responsible stewardship, good governance and transparency through effective reporting.
Acting in the public interest is not, however, a new concept for the accountancy profession, it is the foundation of the accountancy profession and laid down in the ICAS Royal Charter.
As it states in the ICAS Code of Ethics: “A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest.”
In order to meet this commitment, an obligation is placed upon each and every Chartered Accountant (CA) to take individual responsibility for the maintenance of the highest standards of ethical principles throughout their career by adhering to the fundamental ethics principles which are enshrined in the ICAS Code of Ethics.
In 2015, ICAS launched its business ethics initiative – The Power of One – which highlights ethics and integrity are at the heart of the professional responsibilities of ICAS members.
Regardless of whether a CA is newly qualified or has many years of experience, the five fundamental principles in the ICAS Code of Ethics – 1. integrity; 2. objectivity; 3. professional competence and due care; 4. confidentiality and 5. professional behaviour – should direct individual behaviour and, by doing so, CAs are a force for good in the organisations in which they work to the benefit of our broader society.
Leading the way in ethics
During these uncertain times, and when much of the governmental financial support packages being put in place will be funded by taxpayers, the importance for all business decisions to be grounded in the public interest is paramount.
Whether a CA is making major business decisions, providing advice to businesses, making professional judgements whilst preparing financial statements, or providing assurance on a range of subject matter information, society now, as always, is relying upon the accountancy profession to prepare and provide reliable information by which appropriate decisions can be made.
All CAs, regardless of their role or level of seniority, need to demonstrate ethical leadership – they need to take the lead in relation to their own actions, but also challenge others when challenge is necessary. CAs will be under considerable individual pressures, and the need for ethical leadership could not be greater.
There is no doubt that once life returns to “the next normal”, society will seek to learn the lessons of this period of history. There will be reviews into various aspects of the current situation.
While some will focus on the effectiveness of the government response, others will inevitably review the behaviour of business. A likely key focus area will be the outcomes of the various financial relief initiatives that the government has put in place: did the schemes work as intended; did any businesses abuse the schemes that were established; was misinformation provided etc.
CAs 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. If others are not behaving ethically then a CA cannot just stand by and watch it happen. The right to whistle-blow in specific circumstances is contained in the application material that supports the fundamental principle of confidentiality in the ICAS Code of Ethics.
CA must display moral courage
In ICAS’ Power of One publication Moral Courage, it is recognised that it can be difficult to take the ethical stance. The reality is if a CA suspects impropriety and does nothing, the CA could be found guilty of condoning it and could potentially be implicated in a scandal at a later date. Ethical leadership requires moral courage.
The Committee on Standards in Public Life report The Continuing Importance of Ethical Standards for Public Service Providers (2018) called “for greater moral courage among key financial and other professionals in securing and maintaining high ethical standards”.
The report references ICAS’ Moral Courage publication and states: “This guidance is essentially a professional manifestation of the Seven Principles of Public Life. The Committee commends the advice to the profession for its compelling and concise encapsulation of the actions those in unique positions of power, influence and insight must take where they witness behaviour that falls short of these Principles.”
Society will vilify those who do not behave appropriately or are involved in abusing the support systems put in place to help people at this time of great sacrifice.
A distinguished career could easily be shattered by acting inappropriately, or by failing to seek to prevent others from acting inappropriately. The consequences of an inappropriate decision could be potentially ruinous for not only the individual CA, but also their organisation.
Society will judge business and the accountancy profession on its behaviour and actions during this crisis. Public trust has to be earned.
The reputation of the accountancy profession – how CAs are perceived by the public – is defined by what they do, how they do it, and how they treat other people. CAs must lead and champion the ICAS ethical values – the foundations for trust.
There is a need for every individual CA to demonstrate the highest standards of professional behaviour and ethical standards in order to fulfil their profession’s duty to the public interest.
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.