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Ethics and accountancy

Posted by & filed under Careers and Beyond, Programmes.

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When it comes to accounting challenges, ethics must take centre stage. So, what happens when you find yourself in a situation where it is not easy to determine the “most ethical” thing to do? Here are some ideas from the Institute of Chartered Accountants in England and Wales (ICAEW) – a world leader in the accountancy and finance profession – for resolving ethical problems that may come up in your accountancy career.

  1. Identify the facts. Make sure you can identify exactly what the problem is and confirm you have all the relevant facts. Do not make assumptions, because – more times than not – will lead you in the wrong direction. Rather investigate to replace any assumptions you might make with facts.
  2. Confirm the players. Understand who is involved in the situation, find out what they have at stake, and if the participants have conflicts with each other.  
  3. Define the issues. Think about the ethical issues that are involved. Are there professional, personal, and organisational ethical issues? Are there ethical issues that would affect the public interest or the reputation of the accountancy profession? ICAEW’s Code of Ethics is an informative resource for dealing with ethical accounting issues.
  4. Define the fundamental accounting principles affected. For example, is integrity, objectivity, professional competence, professional behaviour, or confidentiality being compromised?
  5. Know the governing policies. Is the affected individual or organisation protected by legislation or regulations? Are there governing policies, rules or procedures in place? If so, are they being followed? How can the organisation’s infrastructure help the situation?
  6. Consider other possible outcomes. Think about how the suggested course of action will fare over time or meet scrutiny from others.
  7. Document! Document! Document! Document your thought processes, discussions and decisions throughout so that you have support justifying your course of action if needed.
  8. Make your decision. Implement the course of action and monitor its progress.

Another helpful resource – for any decision making process in any profession – is Business Ethics: Decision-Making for Personal Integrity & Social Responsibility, by Laura Hartman, Joseph DesJardins and Chris MacDonald. In their book, Hartman, DesJardins and MacDonald outline the ethical decision making process below.

  1. Separate the facts of the situation from the opinions
  2. Recognise the ethical component to the decision
  3. Identify and consider all of the people affected by the decision
  4. Consider the available alternatives
  5. Compare and weigh the alternatives
  6. Consider the effects of the decision on your own integrity, virtue and character
  7. Make your decision
  8. Learn from your experience

Learn more about issues relevant to the accounting profession.

Earn your Management and Professional Accounting BA (Hons) 100% online at Coventry University College Online. Coventry’s respected accounting programme focuses on financial statements, taxation, financial management and business strategy analysis. Upon completion of this online accounting course, you will be ready to apply for accounting positions within various organisations or advance your existing accountancy career.

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