Member Article

Hampshire Accountants combat pressure to act unethically

Accountants from Hampshire and surrounding areas met in Farnborough last night to encourage ethical business practice and fight against fraud as it is revealed that although four out of five businesses worldwide have committed to ethical performance, the pressure to act unethically has increased, according to a new report launched from the Chartered Institute of Management Accountants (CIMA) and the American Institute of CPAs (AICPA) .

Managing Responsible Business, a global survey of almost 2,000 Chartered Global Management Accountants (CGMA) in nearly 80 countries found the main way most management accountants drive ethics in their businesses is by upholding their professional code of ethics (86%) a thought which featured at a CIMA Event ‘Corporate Scandal and Corruption Exposed’ at the Holiday Inn in Farnborugh on the 14th of June. The event looked at lessons learnt from the phone hacking scandal and what Financial Directors should be doing to stop fraud in their businesses.

This approach is supported by the survey which found neither senior management nor boards of directors seem to be reviewing, analyzing and monitoring ethics information at the level recorded four years ago. In 2008, 86 percent of senior management and 68 percent of boards reviewed ethics data, according to the report. In 2012, it was 78 percent and 56 percent, respectively. This “weakened tone from the top” comes as more than a third of those surveyed, 35 percent, said they sometimes or always feel pressured to compromise their organization’s standards of ethical conduct. This compares to 28 percent of respondents in 2008.

The event will be led by Paul Smethurst, the head of forensic and investigation services at City firm Carter Backer Winter LLP , who says: “One of the most effective defences a business can have is a zero tolerance culture towards fraud and corruption. In any organisation the Financial Director should be well placed to put this defence in place and set the standard for governance which is critical to maintaining image and reputation. Any organisation that ignores what is really a straight forward preventative measure must be viewed as being at risk.”

Tony Dyer, CIMA Area Chair representing Farnborough, says: “Management accountants across Hampshire are “in the know” about so much of their organisation’s activities, and champion the difficult balance between ethical transparency and business confidence. Employers and clients can be confident CIMA people uphold the professional standards of ethics and conscience that bring long-term business success even in times like these.” The report is a follow up to one conducted by CIMA in 2008 and is the first time responses from the U.S. have been included. Geography and company size are key factors in the findings, with larger companies from more developed economies generally having more advanced ethics programs. U.S. companies, for instance, are most likely to monitor or evaluate ethical standards, according to the report.

Other key findings from the report include: Ethical Performance: More than half of companies, or 57 percent, now provide training on ethical standards, 49 percent provide a hotline for reporting conduct that violates the organization’s standards of ethics and 25 percent provide incentives for staff to uphold the organization’s standards of ethical conduct, according to the report. CGMAs and Ethical Performance: The main ways CGMAs say they contribute to management of ethical performance are by upholding their professional code of ethics, 86 percent; ensuring the integrity of management information, 83 percent; leading by example, 80 percent. Pressures to Act Unethically: Asked how likely various situations were to result in pressure to compromise standards of ethical business conduct, those surveyed identified the top situations as: working with colleagues from different functional areas within the organization; meeting reporting deadlines; compiling management accounts; and dealing with customers. Business Issues: When asked how relevant various ethical issues were to their organizations, the top issues cited by respondents were security of information , 91 percent, safety and security, 88 percent, bribery, 78 percent, discrimination, 75 percent, conflicts of interest, 74 percent, environmental, 73 percent and supply chain, 72 percent.

CIMA hold regular events around Hampshire and across the UK. For further information visit www.cimaglobal.com/localevents

This was posted in Bdaily's Members' News section by CIMA UK Regional News .