Global Survey on Business Ethics

By Terri Eyden

A recent survey on global business ethics was conducted by the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA), There were approximately 2,000 respondents from close to eighty countries. The survey ‒ Managing Responsible Business: A Global Survey on Business Ethics ‒ explored some key ethical questions by focusing on four business challenges:
 
Ethical culture - The moral nature of an organization and the framework and architecture to support it, including formal roles and responsibilities, codes of conduct, and other policies. 
Accounting for ethics - The range and types of information collected and analyzed and how such information is reviewed and used.
Ethical dilemmas and pressures - The types of threats that employees and management accountants, in particular, face.
Business issues - Core areas of ethical concerns for business and how they're prioritized.
 

Examples of Accounting Firm Ethical Policies

We asked two firms ‒ Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC, and Lattimore Black Morgan & Cain, PC ‒ to share with AccountingWEB ethical policies/codes of conduct that are in place at their firms. 

From Elizabeth R. Doren, CPA, CGMA, Fazio, Mannuzza, Roche, Tankel, LaPilusa, LLC:
  • As an accounting firm and member of the AICPA, as well as the AICPA Governmental Audit Quality Center and the AICPA Employee Benefit Plan Audit Quality Center, the firm has established policies and procedures which adhere to the guidelines set forth by AICPA professional standards.
  • These policies are set forth in our Quality Control (QC) document, which states: "In maintaining a culture of quality, the firm emphasizes the importance of ethics and integrity in every decision that personnel make, particularly at the engagement level."
  • The QC document is provided to all new professional employees and reviewed with them upon hire.
  • The firm's ongoing in-house CPE program, New Jersey Law and Ethics, presented by an outside certified instructor, is a regularly scheduled session and mandatory for all employees to emphasize ethical behavior at all levels within the firm.  
 
From Jessica Utley, SPHR, Human Resources Director, and David Haddock, Director of Training, Lattimore Black Morgan & Cain, PC:
  • Our code of conduct is reflected by our core purpose and statement of values. We are constantly asking the question ‒ how does this activity or action fall within our core purpose and values.  
  • Our core purpose: To use our knowledge, experience, and innovation to solve problems and enhance opportunities for our clients.
  • Our core values are: REACH COMMITMENT
  1. Respect and concern for our clients and for each other
  2. Extraordinary competence
  3. Absolute integrity
  4. Continuous innovation and learning
  5. High expectations and accountability
  6. COMMITMENT to a Balanced Quality of Life
 
KEY FINDINGS
 
Ethical Culture
Companies are recognizing the importance of establishing an ethical culture against a backdrop of a more competitive business environment. 
  • 80 percent of survey respondents reported that their organization has a code of ethics or a similar document to guide staff about ethical standards in their work.
  • 57 percent provide training on ethical standards at work.
  • 25 percent offer incentives for staff to uphold the organization's standards of ethical conduct.
  • 60 percent said their board of directors has formal responsibility for ethics; 49 percent said it's the responsibility of the CEO.
 
Accounting for Ethics
The survey revealed both good and bad news when it comes to the collection and reporting of ethical information. While more firms are gathering information, it's still only a minority, which indicates there's a gap between what firms say and what they do.
  • 36 percent of organizations collect ethical information, and 40 percent report ethical information.
  • 61 percent feel it's important to collect and analyze ethical information, but only one in five believes their organization will do so in the near future.
  • 62 percent collect ethical performance information as part of the organization's regular management information gathering processes; 45 percent collect information in separate focused exercises, such as staff surveys. 
 
Ethical Dilemmas and Pressures
The survey shows that although the majority of respondents see their organizations as ethical, they're experiencing greater pressure to act unethically.
  • 35 percent said they feel under pressure to compromise their organization's standards of ethical conduct. This has increased since a previous survey done in 2008, when 28 percent felt under pressure. 
  • 23 percent have personally observed conduct that has violated organizational ethics standards and/or policy in the last twelve months. Of those respondents, a majority (69 percent) reported it, despite 26 percent feared that they could be regarded as troublemakers. Of the 69 percent, only half felt satisfied about the way their ethical concern was handled.
  • 22 percent said they perceive the most pressure to compromise ethical standards of conduct comes from "working with colleagues from different functional areas within the organization." 
 
Business Issues
There's a wide range of ethical business issues that can impact business success, and some have a greater impact in particular sectors and regions. Security of information, bribery and corruption, conflict of interest, and environmental impact are issues management accountants are likely to encounter.
  • When asked what ethical issues are relevant to their organization, 91 percent cited security of information, 78 percent said bribery, 74 percent reported conflict of interest, and 73 percent said environmental impact.
  • 86 percent said they contribute to managing the ethical performance of their organization by "upholding their professional code," 83 percent said "ensuring the integrity of management information," and 80 percent said "leading by example." 
 
CONCLUSION
 
Overall, the survey shows that management accountants recognize the importance of their role in upholding ethical standards, and that they primarily focus on security of information and the integrity of the numbers.
 
In addition, the survey clearly indicates there are increased pressures within the workplace to compromise ethical standards, despite the increase of ethical codes, policies, and statements that have been put in place.
 
It's key that leadership teams ensure that their stated commitment to ethical practices is fully embedded within the operating culture of the organization. Without it, ethical behavior is likely to be compromised. 
 
Source: CGMA Report: Managing Responsible Business

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