Ethics 'should be taught' to accountants

Subject: Ethics 'should be taught' to accountants Thu Jul 09, 2009 3:39 am

ACCOUNTANTS are under growing pressure from within their ranks to improve their ethical standards, after corporate collapses that have dragged the profession's reputation through the mud.

The director of the Accounting Professional and Ethical Standards Board, Jack Flanagan, has reignited a debate on whether studying ethics should be compulsory in accounting degrees, after finding many courses only pay lip services to moral issues.

In a conference paper presented this week, Professor Flanagan said collapses such as Allco Finance Group, Babcock & Brown and ABC Learning put the focus squarely on accounting ethics. "This series of events has prompted some in the accounting profession to question the current state of ethics education," he said.

Professor Flanagan said courses were biased towards technical training, which risked leaving young accountants ill-equipped to deal with ethical dilemmas. "Ethics shouldn't be an add-on to accounting and auditing education but a fundamental element of it as it informs all professional action," he said.

The paper also quoted a survey which found a "large minority" of third-year accounting students admitted to stealing, cheating in exams, compromising personal ethics at work, and falsifying work expenses.

The peak body, CPA Australia, was reluctant to concede any shortfall in ethical standards, but said more focus on the issue would be worthwhile.

The general manager of professional standards at CPA, Denis Pratt, agreed there was a need for ethical training to be more closely integrated with technical work.

"I think [it's] a valid point … in the suggestion that there should be more of a view that ethics is central and fundamental in running a business," he said.

The global financial crisis has highlighted the huge ethical dilemmas facing accountants. Most glaringly, accountants and auditors are expected to rigorously scrutinise all accounts, but also depend on corporate clients for their pay.

An analyst at the corporate governance consultancy RiskMetrics, Martin Lawrence, said whistle-blowing in the profession was rare. He knew of only one auditor in 20 years to resign over a disagreement management.

"The central problem is that auditors are expected to bite the hand that feeds them," Mr Lawrence said.

As well as calls for more emphasis on ethics, the Federal Government is probing the conflicts of interest in commissions paid to financial advisers, many of whom are accountants.

However, addressing conflicts of interest through training may prove difficult, as sceptics say peoples' moral compass comes as much from upbringing and family as education.

"I'm not sure how well you can actually teach ethics," Mr Lawrence said.

LNK

Ethics 'should be taught' to accountants

Ethics 'should be taught' to accountants

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