The word ethics can be used in a broader degree over what its definition originally covers, and explains ethics or its application: ethical behaviour, to be more than just an act of obeying rules and regulations but in addition involves adopting the right course of action, given the context. One’s ethical bearing or their display of ethics, is depicted in their principles, character and conduct. Ethics, are often assumed to be confined to one’s social and religious affairs however, the term applies to a much wider spectrum which also encompasses personal, professional and business ethics within the mix. ICAP’s code of ethics provides guidance to both the fields of public and private accounting where ethical issues may arise and therefore a comprehensive manual has been published with the aim of assisting members, students, affiliates, and employees of member firms on such matters. On the surface it would so appear as if the implementation of this manual would be fairly limited given it addresses a specific field, however the code has a wider application and any individual, bound by professional and technical standards, having faced situations which impair their professionalism can hope to use this code as a reference.
ICAP’s code of ethics come bifurcated in three portions, the first emphasizing on the general application of the code and the remaining two dealing with chartered accountants in both practice and business. Ideally, a professional should adhere to the doctrines of integrity, objectivity, professional competence and professional behaviour (section 100-150). Integrity in this context refers to the act of being straightforward and honest in one’s professional and business dealings. Such an individual should not be found associated with reports, returns, communication or information that is believed to be either false, recklessly furnished or obscures information in a manner which constructs it as misleading. Similarly, professionals, in their workplaces may be exposed to situations which would impair their ability to remain objective and therefore professional or business judgments should not be swayed by bias, conflict of interest or undue influence.
The professional life of an accountant or any individual for that matter regardless of their profession involves a commitment to learning, professional development and honing of one’s professional skills. An individual therefore has a duty to maintain their professional knowledge which gives rise to the public’s expectation of a competent service. One should therefore act with diligence and in line with their professions technical and professional standards. In cases where the individual comes in contact with user sensitive information, he/she should respect its sensitivity avoid disclosing it to a third party, for a personal gain. Disclosure however, may be permitted in a legal context, and that too should be exercised meticulously (sec 140.7). The doctrine of professional behaviour dictates that an individual should remain compliant with any laws or regulations he/she is obligated to follow and should avoid actions which dishonors their profession, denigrates the work of others or discredit their services in the process. In conclusion one should behave with courtesy and consideration towards others with whom they interact with in a profession capacity.
The most common threat to one’s integrity comes from the actual or perceived pressure from ones superior where the threat of dismissal may provoke the subordinate into taking decisions that are contrary to law /professional standards, decisions they would otherwise not consider. This is referred to as the threat of intimidation
Compliance with these principles is threatened by a broad range of circumstance’s (sec 100.12) involving the threats of self-interest, self-review, advocacy, familiarity and intimidation. The threat of self interest in the context refers to a personal or an immediate family member’s financial gain compromising one’s objectivity when finalizing business decisions. This could be due to an incentive agreement, possible opportunity at an employment, promotion or even commercial pressure from the stakeholders. The threat of self-review occurs when a professional, having submitted an assignment or made a statement is asked to evaluate the same using their professional judgment and naturally would be inclined to conceal their or their colleagues’ error or mistake in order to avoid repercussions. Such a behaviour would impair one’s objectivity. Furthermore, an individual would ofttimes be required to promote the position of their firm and extra care should be exercised in order to project an image which is true, fair and free from error or misrepresentation. The most common threat to one’s integrity and objectivity comes from the actual or perceived pressure from ones superior where the threat of dismissal may provoke the subordinate into taking decisions that are contrary to law or technical/professional standards, decisions they would otherwise not consider. This is referred to as the threat of intimidation.
The significance of these threats is linked with factors such as the source of the pressure or the degree to which, the source of that pressure seeks to alter a piece of information, it could very well be senior personnel (such as a director) which complicates matters. Appropriate safeguards should be sought once the significance of a threat is assessed so it can be reduced to an acceptable level.
To counter these threats, the code of ethics has laid down some remedies, the most common of which is refusal to remain associated with any misleading piece of information and then seeking advice from the senior staff, preferably a rank higher than the most immediate senior. If this seems impractical, numerous companies operate an internal audit department, directly headed by the audit committee and overlooked by the chief executive. This, in most cases serves as a safe platform to share suspected instances of misconduct. The professional body that governs a profession can also be contacted. Chartered accountants for example are at the liberty to report any form of misconduct to ICAP. The last resort would be to seek legal advice and then resign, which on paper appears as an extreme but it might be crucial in maintaining the standards of a profession.
These remedies however should remain as the final course of action and instead measures should be taken so the threat remains restrained. These measures are split in two categories, the first dealing with safeguards that are created by the profession, legislation or regulation whilst the second category relates to safeguards within the work environment. A professional is expected to undergo appropriate education and training and it must be ensured that he/she meets the desired experience and professional development requirements. Additionally, a professional should be bound by corporate governance regulations and professional standards. And Finally, to monitor that the aforementioned are met, there should be timely regulatory monitoring and disciplinary procedures along with external reviews under a legally empowered third party.
The business community too, has come to grips with the importance ethics have on the overall performance and reputation of an entity, which is why the industry leaders namely PSO, Engro, Gul Ahmed, Gadoon Textile Mills, Honda Atlas and Abbot etc. have formulated for themselves, a code of conduct comprising of ethics and business practices. They have well-documented policies and procedures and demand strict compliance under their disciplinary mechanisms. In conclusion, for us to counter corruption, fraud and maintain an overall standard of our good and services, we need to adhere to professional ethics in our workplace.
The writer is a freelancer