Executive Summary
George Bernard Shaw was not an accountant, or a lawyer, doctor or member of any other chartered body for that matter, and so accountants might choose to ignore his aphorism that all professions are a conspiracy against the laity. But it would be particularly arrogant and unwise to ignore the implicit challenge of his words in this 150th year of the oldest professional accounting body in the world, The Institute of Chartered Accountants of Scotland (ICAS).
The Research Committee of ICAS has undertaken an investigation into the ethical standing of accountants because one of the hallmarks of professionalism is that of maintaining high levels of ethical conduct in whatever working environment accountants find themselves. Even if the ethical standing of the profession were not in question, an examination of ethical issues affecting the profession would always be an appropriate exercise for a professional body. However, the second reason for initiating this investigation is more closely tied to the particular circumstances of the current time. Recent and high profile controversies, such as, but not limited to, Enron and WorldCom, appear to have diminished the ethical standing of accountants in the eyes of the general public. So it is timely to look afresh at the pressures that accountants face in ensuring that ethical standards are maintained and to explore the ways in which individuals, firms, business and the profession itself, with or without wider institutional involvement, can respond creatively and usefully to the pressures its members are under by taking ethics to heart.
The report is set out in two parts. The first part of the report describes the research approach adopted and introduces the issues identified by the research. A key finding is that despite formal ethical guidance by accounting institutes, individually and collectively, there is currently no clear framework used by accountants for ethical decision making. The absence of such a framework makes it extremely difficult for individuals and firms to identify any process that would improve ethical outcomes. This report proposes such a framework and suggests that this would facilitate education and training and greatly assist a consistent and rigorous decision-making process within firms and businesses.
Adopting this framework, the second part looks at possible remedies and actions. Whilst the individual is the focal point for decision making, it is recognised that individuals do not operate in isolation from the business environment in which they work. As a result, any corrective action requires a coordinated approach by individuals, professional bodies and institutions. The suggested remedies are looked at from these different perspectives.
The concluding chapter resummarises the recommendations contained in the second part of the report in a way that allows those accepting responsibility for implementation to coordinate their activities with other stakeholders. This chapter also highlights, and amplifies, the implications of the research finding that there is an identifiable time of maximum ethical complexity in an individuals career to which particular attention is justified.
The Research Committee of The Institute of Chartered Accountants of Scotland is pleased to have had the opportunity to stimulate thinking in this important area at a time when the ethical standing of the profession has been questioned. It recognises that its views do not necessarily represent those of ICAS itself, but considers that the whole accountancy profession is concerned directly, or indirectly, with ethical decision making and hopes that its analysis and recommendations will be the subject of wide consideration by all concerned.
ISBN 1-904574-10-6
To view the whole report, please click on the link below:
Full Research Report
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