Have We Forgotten Our Ethics?

Dec 17th 2019
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As the profession moves to add technology to its core of offerings, there is a distinct risk of tabling ethics.

When technology becomes the driver, there is a tendency to choose the path of least resistance. Moreover, in a fast-paced environment the temptation to exclude alternative viewpoints and dismiss those with legacy experience is particularly dangerous.

Even the President of the International Federation of Accountants (IFAC), In-Ki Joo, prefaced remarks on how ethics is vital for accountants with “If you do not keep up with this technology, you will be left behind immediately.”

Technology blurs borders and creates endless opportunities on a global scale. Sectors, industries, disciplines and jurisdictions intersect in the global marketplace; at times, violently colliding. But the profession has an opportunity to mitigate the damage from collisions. In-Ki Joo continued with, “You can produce all kinds of information (but) how do you use that information depends on your integrity and our profession should be the leader in our society using that information for the public interest not for our own use.”

What worries me is there appears to be very little discussion or effort to the mechanics of “how.” The phrase “lack of standards, regulation, or guidance,” is a misnomer for lack of experience, understanding and awareness of the applicable laws and accounting principles.

What is required is a willingness to admit areas of ignorance and employ the resources needed to obtain sufficient knowledge. The accessibility of data on demand provides a false sense of empowerment that cannot be genuinely achieved through technology. We know that bookkeeping software or DIY tax programs do not crown the user with an understanding of advanced concepts.

Fundamental changes need to occur in order for the profession to maintain a position of strength, trust, and leadership. For one, we need to change our attitude toward whistleblowers.

The majority of frauds and fraudsters start with an innocent mistake, an error that goes unchecked. The same is true with whistleblowers. Most don’t start out with an agenda to be an insufferable scold or professional heroine.

Whistleblower rewards are not designed nor create a sustainable or profitable salary. Many do not have the initial resources, motivation, or sufficient evidence to warrant a formal process.

The pay-to-play model of industry alliances and organizations is dangerously debilitating. Those willing to write, ask questions and even offer alternative viewpoints are roundly ignored, dismissed and isolated.

Many of those offering unsolicited input have no other agenda than to protect the public interest, maintain the integrity of the profession and preserve a competitive marketplace. Generally speaking, no one seems to want to pay for research and input that does not directly advance the organization to the identified outcomes. The path of resistance is unjustly characterized as negative and those willing to travel it are isolated regardless of their technical skill level.

Herein lies the rub, a continued move toward excluding informed members of our profession risks fatal outcomes:

1. A position even further behind when the crisis occurs

2. A conversion of ethical actors to malicious ones

3. Obsolesce    

Critical reviews of Tom Mueller’s “Crisis of Conscience: Whistleblowing in an Age of Fraud,” reflect the general attitude and misunderstanding of whistleblowing. The book interviews hundreds of whistleblowers from various backgrounds, time periods, and industries.

The intention is to acquaint the reader with the personalities and experiences of whistleblowers. It is not a phenomenon that should be viewed only in the lens of presidential and national politics. Mueller writes in a later opinion piece, “Whistleblowing only becomes necessary when organizations become more interested in silence and loyalty than in ethics or public welfare, or when government watchdogs have been muzzled or euthanized.”

Ethics and skepticism are the foundation of the profession. A never-ending debate as to whether they can be taught and how, but many agree in most cases they can be learned. Where does one turn in the absence of experience? History.

Asking why a trend or concept flourishes in certain jurisdictions should be top of mind and there should be multiple answers. Blockchain and cryptocurrency are a timely example.

Settling for “regulatory certainty” should not be the accepted answer. Some in our profession have championed Malta, aka “Blockchain Island” and the leadership of this country as ones to emulate.

To the informed outsider, those that promote their actions look like shallow, naïve puppets ready to serve as conduits and mouthpieces for those seeking to conceal illicit gains and disrupt financial systems. For anyone that has not taken the time to inquire as to why Malta is “the place” for cryptocurrency, the story of Daphne Caruana Galizia is a critical read.

Caruana Galizia was a vocally opposed to Malta adopting cryptocurrency because she feared it would exacerbate money laundering. Dedicated to speaking out against corruption, Caruana Galizia was assassinated in October 2017. Decrypt magazine introduced Western crypto enthusiasts to a bit of history in this June article and covered recent developments here.

Members of the accounting profession that walk on the path Daphne led, question how a decade into this technology, we cannot arrive at something of more substance than “cryptocurrency is volatile” as a disclosure to the public. An attitude change is required, and it begins with letting go of the tendency to equate education with adoption.

Adopting and embracing are not required outcomes of learning. As the profession continues on the exciting path of adding technology to its core, we need to mind the foundation upon which the Merkle trees are built. 

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