Ethical help

[bunny]

I am currently doing a masters in accounting. After the enron collapse plus similar here in australia, the accountants got all worried about ethics. Consequently every subject I do has an "ethical section" listing various rules, practises, codes of conduct etc.

Following rules seems like a lazy moral position to me (and obviously so) is this right? Is there a point to rules if you dont think they should be binding? If it's just a bunch of suggestions from some group or other, should they carry any weight in my deliberations if I disagree with them? (Ie - does a rule contradicting my ethical inclinations provide evidence I am wrong?)

Of course, if I work as an auditor, CPA, CA, whatever then I am going to sign something saying I will obey them all. Presumably it's wrong to do that if I have no intention of doing so? Yet I cant practise effectively without joining a professional body...

Any thoughts would be appreciated.

[Phil153]

In my opinion you should follow the letter of the rules you agree to. When you join a professional body, or work in various legal or representative capacities, you cease to be an individual and become an agent of society, or the company you work for. The common good is usually served when people act according to the rules that governing bodies have decided upon. Of course, there are exceptions, but mostly in areas like medicine where it's not so clear cut.

Do you have examples of rules that go against your ethics?

[MidGe]

hiya bunny,

Interesting dilemna. I would have thought from what I knew of accounting that the rules according to the handbook were absolutely linked to ethics, in the sense, that preparation and treatment of accounts had to be done to reflect the facts for the consumers of the reports. That being so, things like recognition of revenue, valuation of assets etc.. has to be defined differently accross different industries and is rightly so.

Now at the end, those rules are really a subset of moral rules. They are rules and limited in scope, and apt at manipulation by "creative" accountants. [img]/images/graemlins/smile.gif[/img]


I think, your moral judgement should be followed in tightening the rules where is so appropriate and voicing your concerns where they are being used in an unfair way. I am sure that neither bodies (ACA, CA, or whatever) will ever revoke your membership for such an attitude. Of course, you may loose some clients, but, hey, you will hopefully feel right about it.

I hope this thread gets going because there are many grey areas in accounting and both saints and villains in the profession. I know which type I would rather have as an accountant, and it is not the villain! [img]/images/graemlins/smile.gif[/img]

[Darryl_P]

I know what you mean, although my struggle with the issue happened a while ago, ie. at first I was a good boy who followed the rules, and now I live my life by my own rules (more or less).

In my case it was the Society of Actuaries. When we "graduated" we had to take a so-called Fellowship Admissions Course which was all about understanding and pledging allegiance to the code of professional ethics for actuaries.

It's basically exactly as Phil says: in a nutshell, you are selling your soul to the establishment. If you are not interested in such a bargain (like I am not now, even though I was then), then I'd recommend not pursuing such a profession. It's the only way to stay clean and maintain sovereignty over your soul IMO.

[Metric]

My general impression is that "following rules" and signing your name to them is less about ethics and more about legal butt-covering.

[bunny]

[ QUOTE ]
In my opinion you should follow the letter of the rules you agree to. When you join a professional body, or work in various legal or representative capacities, you cease to be an individual and become an agent of society, or the company you work for. The common good is usually served when people act according to the rules that governing bodies have decided upon. Of course, there are exceptions, but mostly in areas like medicine where it's not so clear cut.

Do you have examples of rules that go against your ethics?

[/ QUOTE ]
I didnt get this far, it was more the potential I could foresee. I guess one example I can think of is the process if an auditor discovers there is a perceived conflict of interest within the management group (eg they have adopted some accounting practise (odd but still legal) which reduces the entity's profit at a time when there is the possibility of a takeover by another company. If the takeover goes ahead, they may lose their job security, bonus structure, etc etc - perhaps they are deliberately understating profit to make the entity a less attractive target).

The process here is to bring it up with the management group first, then the board of directors, then ASIC (corporate regulatory body in Australia) and then resign if there is still no resolution. I'm not convinced it is right to report to an outside body about internal matters (when the practises in question are legal, just slightly odd) when you have been hired by the entity itself.

I'm not sure this is such a great example, since I dont really disagree but suppose I did find it unethical. Your view would be that's what I signed on for so that's what I should adhere to - even if I felt part of a group "doing the wrong thing"?

[bunny]

[ QUOTE ]
hiya bunny,

Interesting dilemna. I would have thought from what I knew of accounting that the rules according to the handbook were absolutely linked to ethics, in the sense, that preparation and treatment of accounts had to be done to reflect the facts for the consumers of the reports. That being so, things like recognition of revenue, valuation of assets etc.. has to be defined differently accross different industries and is rightly so.

Now at the end, those rules are really a subset of moral rules. They are rules and limited in scope, and apt at manipulation by "creative" accountants. [img]/images/graemlins/smile.gif[/img]


I think, your moral judgement should be followed in tightening the rules where is so appropriate and voicing your concerns where they are being used in an unfair way. I am sure that neither bodies (ACA, CA, or whatever) will ever revoke your membership for such an attitude. Of course, you may loose some clients, but, hey, you will hopefully feel right about it.

I hope this thread gets going because there are many grey areas in accounting and both saints and villains in the profession. I know which type I would rather have as an accountant, and it is not the villain! [img]/images/graemlins/smile.gif[/img]

[/ QUOTE ]
It's true that some of the rules have flexibility built into them, you're supposed to "use professional judgement" in that situation. I could imagine a situation existing where the rule was clear - yet I disagreed that it was right. I feel torn between the "I'm just being an accountant, that means I'm hired to implement the rules, not to make my own so I must adhere to all of them" camp and the "Do the right thing, all the time" crowd.

[bunny]

[ QUOTE ]
I know what you mean, although my struggle with the issue happened a while ago, ie. at first I was a good boy who followed the rules, and now I live my life by my own rules (more or less).

In my case it was the Society of Actuaries. When we "graduated" we had to take a so-called Fellowship Admissions Course which was all about understanding and pledging allegiance to the code of professional ethics for actuaries.

It's basically exactly as Phil says: in a nutshell, you are selling your soul to the establishment. If you are not interested in such a bargain (like I am not now, even though I was then), then I'd recommend not pursuing such a profession. It's the only way to stay clean and maintain sovereignty over your soul IMO.

[/ QUOTE ]
Thanks

[bunny]

[ QUOTE ]
My general impression is that "following rules" and signing your name to them is less about ethics and more about legal butt-covering.

[/ QUOTE ]
This has only recently become true in Australia at least. Previously the enforcement of accounting and auditing standards was solely the responsibility of the professional bodies (who could warn, fine, suspend or expel you but that was it). They now have the backing of law (in the most important cases anyhow).

Do you think it's right to behave unethically to prevent yourself from breaking the law?