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Unethical practices still rife amongst accountants, finds research

The research which was conducted amongst 1696 accountants (400 in the UK) between July-September 2015, revealed that more than a nearly a half of accountants (48%) had either been pressurised (or knew of someone that had) by a manager or partner to ignore an adjustment that should have been made to a set of accounts.  

In addition, four in ten accountants are aware of a senior staff member within their organisation making a decision that deliberately chose a commercial result for the company or client, even though the decision could be unethical.  The majority (53%) believe that senior staff members within their organisation do not appear to act independently from the commercial pressures faced by the business.

Many also believe that to some degree those in the profession (% in the profession outlined below) have helped their clients create a set of accounts that are deliberately misleading:

Less than 5% 45%,  

Between 5-10% 21%, 

Between 10-20% 18%

More than 25% 10%

At least 50% 6%

Despite knowing that such practices are going on, it seems that those in the profession may not want to come forward on the grounds that whistleblowers are not being protected.  Three quarters of accountants believe that if an employee reports the conduct of a colleague, the organisation does not do enough to ensure the whistleblower is protected against victimisation or dismissal.  Furthermore, nearly two thirds of accountants do not believe that employees are protected from victimisation or dismissal if they report the wrongdoing of a client.

Other highlights of the research include:

54% of respondents do not believe industry bodies are doing enough to promote awareness of ethical standards

54% believe that the accountancy profession should be governed by a set of rules with the remainder believing principles are sufficient

If someone signs off a deliberately misleading set of financial statements

56% of respondents believe that the punishment should be & lsquo;banned from practicing in their profession’

13% of respondents believe the person should be sent to prison

7% believe that the person should be reprimanded by their boss

8% believe that the person should receive a hefty fine

16% believe that the person should be fired from their job

Simon Wright, operations director at, commented, “Over the last decade, different industry bodies and the Government have been proactively looking at ways to mitigate risk against & lsquo;another Enron’ happening. In the UK, there has been a spate of legislative measures including the Companies Act 2006 requiring each director “to exercise reasonable care, skill and diligence”, The Bribery Act 2010 and more recently the Enterprise and Regulatory Reform Act 2013 introduced the & lsquo;Whistleblowing’ legislation.  

“Meanwhile member associations and institutes, have been identified certain ethical principles as being of crucial importance to the profession.  However, ethics tokenism (simply identifying and articulating them) is not enough.  In order to put them into practice, organisations need to adopt values that will adhere to the principles and maintain the confidence of stakeholders.”

Marc Jones, partner and Employment Law specialist at Turbervilles Solicitors, commented,

“There is a strong call to action for employers to make sure they have a publicised whistleblowing policy in place to ensure that staff are not fearful of exposing unethical practices and protect them if they "blow the whistle".  Otherwise, it’s a catch 22 situation where staff remain quiet and not  "rock the boat" and avoid possible victimisation, whilst other staff leave behind a trail of unethical practices.

“If not already in place, employers should strongly consider drawing up clear ethical policies so staff are aware of when they may be “crossing the line”, the penalty for breaching this and the importance of disclosure.  At the same time, employers also need to create an environment where staff are encouraged to come forward should they suspect unethical behaviour has or is taking place.”

Wright concluded, “There is a school of thought that accountants tend to focus on the technical issues and lack ethical sensitivity to recognise ethical dilemmas involved with their work, which could ultimately lead to making wrong decisions. Perhaps accountants could be trained or guided to identify the moral dimension of seemingly technical issues.”



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