Ethics Challenges Faced by Accounting Professionals | December 2021

January 6, 2022

Geoffrey A. Hirt

Ethics challenges faced by accounting professionals are growing. For example, a client may request that an accountant change their opinion concerning financial conditions or lower tax payments. Other issues involve compliance with complex rules and regulations, data overload, contingent fees, and commissions.

Some accounting professionals believe that as the pandemic wanes, the ethical challenges that accountants face will intensify. For example, with so many people focused on economic recovery and growth, companies may put pressure on themselves to post good numbers. Now more than ever, accountants must be committed to codes of ethics.

An Economy in Recovery

According to a survey by the Association of Chartered Certified Accountants (ACCA) and the Institute of Management Accountants (IMA), one in five finance and accounting professionals faced ethics challenges because of COVID-19. This is expected to continue.

Nearly two years past the onset of COVID-19, most industries are still in recovery. As businesses emerge from the crisis, professional accountants will find themselves serving clients in varying stages of recovery. For example, the U.S. vaccination rate for full vaccination is 57.6% compared to India at 21%. This has significant implications for business returning to normal.

Greater Demands

Auditors of financial statements may experience greater demands for support and efficiency. For this reason, auditors must consider the importance of and threats to independence. One example of an independence issue is when an auditor is asked to provide advice or recommendations to an audit client.

Burnout

Burnout and mental wellness have been and continue to be growing concerns in light of the pandemic. This makes a strong organizational culture and strong communication particularly important in the accountancy profession. Accountants must be able to act with due care and mindfulness.

Focusing on the Future

Many companies invested heavily in technology during the pandemic as business shifted largely online. This rapid digitalization has opened the door to a wave of cybercrime. Data breaches, for example, happened more frequently and became more expensive. As working from home becomes more widely accepted in the long term and more accounting professionals access data remotely, these accountants must develop a deeper understanding of technology and its risks.

While accountants, due to the nature of their work, often focus on the past, it is important to consider what lies ahead. Rapid digitalization and its ethical consequences should be considered by professional accountants so they can stay a step ahead. While technology can eliminate manual work and generate value for accountants, it is also filled with risks. Accountants who play a role in setting internal controls and implementing compliance processes can help shape the future.

In the Classroom

This article can be used to discuss business ethics (Chapter 2: Business Ethics and Social Responsibility) and the importance of integrity in accounting (Chapter 14: Accounting and Financial Statements).