Stuart Gentle Publisher at Onrec

Ethics of accountancy profession under scrutiny - research published today reveals more than a third of accountants are aware of a senior staff member deliberately going ahead with unethical misleading accounts /advice

Half have been /or know of a fellow worker that has been pressured by a senior manager or partner to ignore account adjustments

More than a third of accountants admitted they are aware of a senior staff member at their current workplace who has made a decision to deliberately chose a commercial result for the company, even though the decision could be regarded unethical, according to the latest research published by global job board[1]

The shocking admission follows on from findings in the research which revealed that half of accountants surveyed have been pressurised /or know someone that has been pressurised by manager or a partner to ignore an adjustment that should have been made to a set of accounts. 

Nearly a quarter of accountants (22%) believe that more than 25% of the profession have helped their clients create a set of deliberately misleading accounts.  With a further 16% believing 10-20% of the profession are involved in shady activity and a further 24% believing the percentage involved is between 5-10% of the profession.

Offences highlighted by respondents included:

  • “The bank started lending to low income earners who were left with unsurmountable levels of debt”
  • “The senior manager advised on how to escape tax authority”
  • “Actions [by the accountant] led to misleading reports to board”
  • “A client [GP] was bribed with goods, a holiday and meals if he switched products to a cheaper one”
  • “False details of assets and earnings used for minimising a divorce settlement”
  • “Price transparency was compromised”
  • “A large contract was awarded to a related party without following the policy which required competitive bidding”
  • “A senior manager paid an individual to get a tender”
  • “I know there was a submission of fake reports about expenses”
  • “I pointed out serious accounting/legal violation by senior executive and was penalised for doing it.”

Others, whilst admitting unethical practices goes on within their organisation, were less forthcoming about the nature of the misconduct stating it was a confidential matter.

Perhaps, to some degree, this lies with the fact that some are too scared to speak up and report the unethical practice. 

However more than third (38%) said they would confront their boss directly if they suspected he /she was participating in unethical actions, with a further 37% stating “they would remain in their job and tell their HR or industry body’. 6% said they would resign themselves, as they would not want to be associated with a firm that undertakes ethical practices.  4% said they would do nothing as reporting on their boss would not achieve anything.

Other highlights of the research included:

  • Nearly two thirds (65%) of accountants believe businesses do not do enough to protect an employee against victimisation or dismissal should they report the misconduct of a colleague and
  • More than half (51%) believe anyone which signs off a deliberately misleading set of financial statements should be ‘banned from practicing in the profession’, with nearly a fifth stating they should be fired from their job and nearly 10% saying that prison should be the punishment.

Simon Wright, Managing Director of comments:

“It’s now 17 years since the Enron scandal came to light. Yet since then, there have been other corporate accounting debacles.  Our research reveals there is still a way to go to ensure the profession is adhering to ethical working practices.

“Whilst the majority feel they would directly report misconduct, there is clearly a disjoint between the intention and reality of conduct in the profession.

“There is to some degree an underlying concern about the repercussions for towing the ethical line; whether this is about losing their job, losing a client for speaking up, a risk in promotion or damaging their career reputation.

“More has to be done, not only at a company but industry level to create a code of practices which encourages the right working culture to report fairly and without fear.”

[1] The research amongst more than 400 accountants took place during August-September 2018