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Ethics for finance professionals

By Lesley John, ACCA Caribbean Thursday, August 10 2017

Ethics plays a crucial role in everything that accountants do. Members of the public and clients trust professionals in all fields to commit to a high standard of ethical behaviour and a willingness to Ďdo the right thing.í

Given the complexity of many financial transactions as well as the importance of best practice to business and society, professional bodies such as ACCA (the Association of Chartered Certified Accountants) have a particular responsibility to uphold and lead on ethical issues.

The ACCA Code of Ethics and Conduct (the Code) is binding to all our members and students, as well as any partner (or director) in an ACCA practice. Itís based on the International Ethics Standards Board for Accountants (IESBA) Code, and the fundamental principles that we set out are the same as IESBAís.

In order to stay vigilant to omissions, errors and deliberate accounting violations, all professional accountants will need to develop and balance necessary professional quotients to fit their role and stage of career. A key quotient is technical skills and ethics (TEQ): The skills and abilities to perform activities consistently to a defined standard while maintaining the highest standards of integrity, independence and scepticism.

Finance professionals must think and behave with integrity, independence and professional scepticism. They must also demonstrate this to stakeholders including regulators, investors, colleagues, and entities that are the subject of audit and assurance engagements. Vigilance is also needed in observing and applying local and international laws, regulations and standards relating to engagements for the audit and assurance of historical financial statements and other subject matters Ė such as ISAs, federal company laws, and regulations on data protection.

Through maintaining high standards of quality in the practice of audit and other assurance, and in practice management, finance professional can ensure there is quality control. Additionally, assessing and responding to risks of material misstatement within appropriate legal framework can aid in detection and reporting error and fraud.

There are wider business issues when it comes to ethics and ethics underpins everything professional accountants do. An ethical dilemma may be resolved by applying a conceptual framework. However, in order to achieve this, we first need to understand fundamental ethical principles so we can ensure thereís minimal risk of them being undermined.

An honest appraisal of the threats to those principles requires the application of personal ethics. Thatís why the ACCA Rulebook isnít just a list of rules, but instead sets out a framework that helps us to resolve or avoid ethical dilemmas in a way that shouldnít conflict with our personal ethics.

In the global fight against corruption in all its forms, it is vitally important that potential whistle-blowers have a clear view of not only the avenues available for speaking up, but also the full path ahead of them as they go through the whistleblowing journey.

This isnít just the right thing to do, itís also best for the business. If employees feel that wrongdoing will be dealt with promptly, fairly and in a transparent manner, they are far less likely to make the issue a public one.

In order to foster a successful speak up arrangement, organisations need to consider how the arrangement interacts with cultural issues. Whilst cultural challenges are surmountable, this might take a little more time and effort using suitable strategies to address issues such as regional differences and language.

Additionally, itís highly worth businesses considering the use of an external independent channel that sits alongside their internal conduits. It may feel counter-intuitive to set up channels that are external and possibly more formal when you are trying to build trust internally. However, if people use independent external channels and have a positive experience, the trust developed from the experience can transfer to others, including internal channels that they may use in the future.

Now more than ever, how an organisation does business is just as important as the results they achieve. Itís no secret that many of the great reputational disasters of recent years have been made worse by attempts to sweep them under the rug. If effective speak-up arrangements are implemented throughout corporate governance, public sector accountability and professional responsibility, it will create robust risk management, which is in an organisationís highest interest.

Ethics and trust in a digital age, ACCAís recent global study of 10,000 professional accountants, found that 95% of those at CFO level or higher believe ethics is very important to their companyís reputation, internally and externally. That commitment grows because they recognise that in an automated age, human judgement becomes more integral to how decisions are made. When faced with a data breach or a companyís exposure to supply chain irregularities, customers and investors wonít look to a systems bot to blame.

Whilst the rise of the robots has been flagged as a threat to professions, it actually represents a new frontier where the skills and judgment of professionals are critical. Accountants are therefore set to remain at the front-line of ethical challenges in business. But doing the right thing in a digital age, digital must also be a whole business concern.

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