The relevance of ethics to management education in the accounting profession.

It is sometimes questioned whether professional judgment and ethics can be taught. Prior to the major corporate scandals involving auditors and accountants, the education model for accountants focussed mainly on teaching the technical elements of accounting. We have slowly seen a shift in more recent years of including the ethical and moral aspect of the profession and ethics which are being included and discussed in the educational programmes and curriculums for accountants.

The goal of including ethics within the curriculum is to help individuals acquire skills to deal effectively with ethical challenges they may come across during the course of their work and provide them with the necessary tools and guidance when they encounter ambiguous situations in practice. This cannot be achieved by solely studying the code of ethics and professional conduct, but rather a process whereby individuals become more consciously involved in making ethical decisions and this is brought by including it in the educational system for accountants and also through mentoring programmes during the professional career.

Accounting is a profession demanding expertise and accountants have clients who depend on the said expertise. At the same time, accounting has an ethical dimension. An accountant has the responsibility to act in the public interest and not solely to satisfy the needs of the employing organisation or client. In carrying out their responsibilities as professionals, accountants should exercise professional skeptiscm and moral judgment in all the activities. Education of ethics should be the teaching of the subject to students carrying out the various courses available for the accountancy profession and also a continuous education during the professional career. Ethics education is not a list of dos and don’ts, as this can give the misconception that anything is acceptable if it’s not specifically forbidden. Ethics education is a journey of sensitisation and development where one becomes more aware of the ethical dimensions of matters and challenges encountered. Enriching ethics in accounting education will change the mind-set and will assist the accountants develop skills to assist them with actioning such critical decisions.

Ethics education can provide insights into how to adjudicate between conflicting principles and show why certain courses of action are more desirable than others. Ethics education, as defined by Langenderfer and Rockness, is more than studying the code of professional conduct, but rather a process whereby individuals become more consciously involved in making ethical decisions.

The objectives of Ethics education are to
• Relate accounting education to moral issues in a business context
• Provide the members of the profession with the tools to take decisions that have ethical implications
• Develop a sense of moral obligation and social responsibility
• Develop the skills required to deal with ethical conflicts or dilemmas
• Develop the skills to deal with the ambiguities of the accounting profession

The IESBA Code of Ethics which is applicable to the professional accountants specifies that a professional accountant’s responsibility is not exclusively to satisfy the needs of an individual client or employer, however also to act in the public interest and that a professional accountant shall comply with the fundamental principles:

• Integrity
• Objectivity
• Professional Competence and Due Care
• Confidentiality
• Professional Behaviour

The above principles are the basis of ethics education within the profession, they provide an ethical framework, and therefore the professional judgment.

1. Integrity
Demonstrating integrity means being straightforward and honest in all business and professional relationships. Maintaining integrity requires that accountants do not knowingly associate themselves with information that they suspect is false or misleading.

2. Independence and Objectivity
Ethics and independence go hand in hand in the accounting profession. Independence is one of the pillars and a critical component within the profession as it provides the trust to the stakeholders for making unbiased decisions and recommendations that benefit the client. To remain objective and independent, it is also necessary to ensure that recommendations are not subject to outside influence.

3. Confidentiality
The principle of confidentiality imposes an obligation on all professional accountants to refrain certain confidential information they are in possession of. The principle of confidentiality is not only to keep information confidential, but also to take all reasonable steps to preserve confidentiality

4. Professional Competence
The maintenance of professional competence requires a continuing awareness and an understanding of relevant technical, professional and business development. As technology, legislation, a professional accountant must remain up to date.

5. Professional Behavior
Ethics require accounting professionals to comply with the applicable laws and regulations, They shall conduct themselves with courtesy and consideration towards all with whom they come into contact when performing their work.

These areas are of critical importance within the accountancy profession. Knowledge of the said principals and how to apply these in practice is therefore fundamental. Providing the necessary examples and having people with the relevant experience giving guidance on the right behaviour and considerations which should be made in ambiguous situations helps develop a transparent approach to governance and related matters.

IFAC made available a study Assessing and Improving Professional Accountants’ Ethical Capability published by Dr Cristina Neesham which outlines the ethical challenges accountants are faced with and also proposes recommendations. Interestingly, the study identified inter alia:
Education and training needs: mandatory ethics training; the development of case study banks for experience-based complex ethical situations; the design and delivery of multi-media based ethics training programs; the intensification of associated soft skills training (such as critical thinking, ethical reasoning, communication, and conflict management); and the publication of anonymized real cases of ethical breaches, as well as best ethical practice, with evaluations of ethical issues involved and alternative solutions; and

Advice and mentoring needs: increased availability of professional advice services, maintaining expert ethics hotlines; and coordinating national, state, or local mentoring networks and peer-to-peer resolution groups.

Teaching ethics to the accountancy profession comes with a number of challenges mainly because ethics principles are different to the technical topics which make up the study courses. One needs to have the right resources to be able to teach ethics as they require the necessary skills and experience. Locally, the accountancy profession has already integrated ethics in the accounting classes which sets the right tone and the foundation. It is critical that this is not a one off process during the qualification phase, but that it is part of the continued development of the professional accountants as it provides them with a sense of ethical and moral responsibility throughout their careers.

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