Blogging ethics to the FT

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The FT ran an article on the moral dilemma facing accountants and the need to train them in ethics on 3 January.

My blogging associate, Dennis Howlett and I both have strong opinion on this. We lobbed in a letter and today it saw the light of day. This is what we said:

Accountants do need to address the moral maze ("Accountants face up to the moral maze", January 3). Case studies are not the answer, though. Nor is pondering a micro-issue such as counterfeit Harry Potter books.

Accountants need to address their own pressing ethical issues before a study framework on ethics will be seen as relevant. The first issue is: for whose benefit are financial reports prepared? The International Accounting Standards Board assumes that the user is the person who wishes to trade in but not hold the shares of an entity. But is that really all accountancy is about?

The second key question is about how accountants add value. Most in the profession think that is in getting round the rules of taxation. But is such an anti-social activity really what a profession should aspire to? These questions arise out of a shift in thinking about the notion of "stewardship", which should be at the core of accounting.

Over the past two decades stewardship has changed from meaning accountability to society to the point that management is seen as responsible only to investors. The accounting profession has responded by reframing its position on audit accountability so that no notice is taken of wider social obligations.

It is this reduced horizon of accountability that has done the profession and the public a disservice by sidelining the ethical framework and independence that were once hallmarks of audit and accountancy services.

Until accountants realise that in taking this position they undermine not only themselves but also public trust in business, they will remain in the moral maze. Right now they do not have the vision or leadership to break out of this race to the bottom. No amount of training will overcome that.

Richard Murphy
Dennis Howlett