Globally, the accounting profession is challenged on many fronts. Regulations are tighter, complex and in flux; accounting standards can mean different things in different places; technology is replacing accounting jobs; and no matter where in the world, accountants are blamed first when things go wrong.
ACCA, which qualifies accountants to practice, says its new syllabus for students has at its core an ethics and best practices module for when they start working in the profession. They say, as a result, their course builds technical skills, while instilling ethical professional conduct.
ACCA Regional Director for the Middle East, North Africa and South Asia Stuart Dunlop says the improved course will give accountants and auditors the skills and ethics knowledge to guide them through corporate governance and corruption-related challenges.
Excerpts of the interview are as follows:
The accounting profession gets a bad rap sometimes. How should it deal with this?
The only way of dealing with perceptions is by being transparent: by inviting people to see some of the good things the profession is doing. That’s the only way. Auditing, an important part of the accounting profession, came into scrutiny after the global financial crisis. There are many implications of that. Regulations have tightened, and I even hear some jurisdictions talking about new laws to hold accountants liable for getting things wrong. Many people asked where auditors were and how the financial crisis was even allowed to happen. This was understandable. It has taken a long time for the profession to regain some of the trust that was obviously undermined because of the crisis.
People criticise auditors when things go wrong in public companies. Are these perceptions and expectations fair?
It’s difficult to be objective about that. We all have opinions about it. If you look at the history of audit across the world, and look at the small number of issues that are reported, it is irrefutable that audit adds value to society. An auditor’s role is giving an opinion on financial statements; so I think it is unfair that people think the profession should be held responsible for the financial crisis, but it’s understandable.
It’s dangerous to start looking for scapegoats. This isn’t the only market in the region that I’ve heard of that proposed imminent legislation targeting auditors for getting it wrong. I am not sure that will take us where we want to go to in terms of quality. The answer lies in allowing professional accounting bodies to regulate their members to international standards.
[pullquote]It’s dangerous to start looking for scapegoats. This isn’t the only market in the region that I’ve heard of that proposed imminent legislation targeting auditors for getting it wrong[/pullquote]
For instance, ACCA members are governed by stringent ethical and professional standards. If anyone suspects a member’s professional or ethical misconduct, they have the right to make a complaint. If an ACCA member is found behaving illegally or unethically, that person can be disbarred from the profession.
Aren’t ethics difficult to deal with because it is subjective?
Ethics should not be subjective. I will blow the horn for ACCA, which is making an attempt to assess ethicality. We introduced something called an Ethics Module, which students must complete to practice as professional accountants. So we are trying to remove some of the subjectivity that I am sure exists but does not have to.
Should accountants blow the whistle?
It takes an awful lot of personal conviction and guts to blow the whistle. It’s a hard thing to do. You don’t just walk into a new job. It takes a lot of courage and conviction. Sri Lanka is a developing economy and the pieces are in place to deliver growth. A robust, transparent and credible accounting profession helps build investor confidence. You need these professionals to be ethical, and they need a little bit of courage to face some of these professional dilemmas. The ACCA qualification is attempting to prepare professionals for these challenges. ACCA also plays an advocacy role in many parts of the world. In many different jurisdictions, ACCA members advise governments individually or in collectives.
There is an opportunity for ACCA to work with the accounting body here to drive important changes to improve governance. We collaborate with national bodies elsewhere in the region with that in mind. Ultimately, the buck stops with the members of those bodies. If they feel the need is there for change, they have an obligation to drive it.
How is the accounting profession evolving in the region?
For many people in this region, a professional qualification was primarily a ticket to better opportunities in developed countries. I’m seeing a change over the last five years or so.
Now, countries in this region offer better opportunities domestically, and many professionals don’t leave. We’ve seen ACCA members setting up their own businesses and actively contributing to their home economies. Are they driving enough changes or fundamental improvements in governance, transparency and ethicality? I can say they are certainly being heard.
Unfortunately, you do find a lot of business-through-relationships in this part of the world. It is tightly entwined with the culture. We believe our members are in the vanguard of trying to deliver global standards in ethicality, transparency and governance. They’ve already proven they understand what these mean by passing the professional examinations. They are regulated and monitored by ACCA to ensure those standards are upheld. Globally, the profession is facing several challenges.
Regulations, rules and laws are tightening and in constant flux. Also, there is an extensive list of financial reporting standards that are used in a large group of countries, and all these are in a state of flux at any one point in time.
Technology is posing challenges and opportunities. Fewer people are doing basic bookkeeping, rudimentary financial accounting is offshored and there are fewer job opportunities in developed markets. Robots perform repetitive tasks and the technology is improving. On the other hand, technology is opening developed markets for talented professionals from all over the world.