This analysis addresses the main aspects to understand the structure of the codes of ethics for accounting professionals, which is one of the most organized professions worldwide and the focus of this text is based on the guidelines of the Mexican Institute of Contadores Públicos (2018) and The International Federation of Accountants (2018).
The relevance of the code of ethics
A code of ethics is a set of norms that give meaning to the values and principles of conduct, shaping the ethical rules of a profession. In the case of accounting professionals, these codes usually have 3 parts: General application of the code through fundamental principles for professionals through a conceptual framework; identification of threats to ethical behavior and safeguards in this regard; and a final part referring to sanctions.
In general, 5 principles to be borne in mind by the accounting professional are contemplated:
- Be frank and honest in all professional and business relationships. Do not allow conflict of interest or prejudice, as well as undue influence of third parties to prevail over professional judgments. Competition and diligence. Maintain both aspects at the highest levels so that clients receive competent services based on the latest advances in practice. Respect the confidentiality of the information obtained as a result of professional and business relationships, avoiding the dissemination of information without specific authorization, unless there is a basis legal to do so. Professional behavior. Comply with legal and regulatory provisions that may discredit the profession.
Threats and safeguards
Threats in ethical behavior arise from various circumstances that compromise the actions of accounting professionals, identifying 5 threats:
- Self-interest threat. When the financial interest improperly influences the professional Threat of revision. That the professional incorrectly evaluates or misjudges, adversely affecting the conclusions of the work. Threat of advocacy. That the professional takes a position where it affects the client or the entity for which it serves without foundation, manifesting a significant lack of objectivity. Threat of familarity. When there is this relationship with the entity's future client in such a way that the accounting professional shows himself with full affinity to the client's interests. Threat of intimidation. When the accounting professional is discouraged from acting objectively.
In turn, safeguards are measures to try to mitigate threats to an acceptable level. In general, they are of two types: instituted by profession; and instituted by the work environment or professional activity.
The exercise of the accounting profession independently
In this sense, the code contemplates aspects such as the professional appointment or formal assignment of the professional service, the establishment of fees and remuneration, the marketing of professional services, and the independence of audit and review assignments.
Regarding professional appointment, this implies:
- Customer acceptance. If it is not convenient for the professional to serve a specific client, they will avoid accepting this service relationship. This, if it is concluded that it is not possible to reduce the threats that compromise the provision of the service. It refers to accepting only what professionally can be offered competently and correctly. Changes in appointment. This refers to the cases in which the replacement of the professional is appropriate, determining the reason for accepting or not an additional order.
Regarding fees, the accounting professional can propose the appropriate fees. If it determines them inferior, this does not represent in itself a lack of ethics and it is possible to do it bearing in mind the technical foundations that support this option.
In the marketing of professional services, it refers to when the accounting professional tries to obtain services through marketing strategies that are usually used by industries worldwide, situations that may threaten the fundamental principles of their professional performance, such as threatening the self-interest in compliance when the service is offered through advertising for the purpose of selling but is not consistent with the service to be provided.
And with regard to the independence of audit and review assignments, this refers to the fact that when providing the audit service, the accounting professional must have total independence from the client, and this independence must be mental and of appearance. Mental refers to expressing its conclusions without being affected by influences that affect the judgment of the accounting professional; and apparently it refers to avoiding facts and circumstances that allow a reasonably well-informed third party to conclude that the integrity and objectivity of a firm or the professional accounting team has been compromised.
The exercise of the accounting profession within the company
When the professional may face threats when developing his profession within the company, here the aspects to consider are 4 according to the code of professional ethics: potential conflicts or interests; preparation and presentation of information; performance with sufficient specialization or expertise; and financial interests and incentives related to information reporting and decision making.
With regard to professional conflicts, the professional must comply with the fundamental principles of the company, but conflict may occur between the professional principles and the purposes of the entity for which he collaborates.Therefore, it is necessary to avoid acting against the law or regulations, and against technical or professional standards. With regard to the preparation and disclosure of information, this refers to presenting information to be used both inside and outside the entity in which you work, but the nature of the business operations must be clearly described according to the information standards. relevant financial, and fully specifying all important aspects. With regard to acting with sufficient specialization, experience or expertise, it refers to the fact that the accounting professional should not accept jobs if he does not have the relevant conditions in terms of time, does not have adequate or complete information, and does not have training nor adequate resources to provide the service required.And finally, with respect to the conflict of interest, it refers to the fact that the accounting professional should avoid using the information to obtain benefits and own interests.
The accounting profession in teaching
In their performance in teaching and research teaching at higher education institutions, the accounting professional must bear in mind the following aspects. First of all, you must guide your students so that in the future of their professional practice they always act with strict adherence to professional ethical standards. Secondly, it must be kept up-to-date in its areas of specialization, to transmit to the student the most advanced knowledge in theory and practice. Third, students must be addressed with total respect and dignified treatment, urging them to constantly improve themselves. Fourth, when exposing your chair, it is possible to support yourself by addressing real cases, but you must refrain from providing the identification of the people or entities of said cases,unless they are in the public domain or have express authorization to disseminate the information. Fifth, the professor must relate in an appropriate way, avoiding damaging the reputation or prestige of students, professors or other professionals. And in sixth place, the accounting professional in his teaching tasks must be respectful of the prescribed discipline and rules of good conduct of the institution in which he collaborates, but maintaining his mental independence and critical spirit in relation to developments or advances in the science or technique under study in your teaching work.And in sixth place, the accounting professional in his teaching tasks must be respectful of the prescribed discipline and rules of good conduct of the institution in which he collaborates, but maintaining his mental independence and critical spirit in relation to developments or advances in the science or technique under study in your teaching work.And in sixth place, the accounting professional in his teaching tasks must be respectful of the prescribed discipline and rules of good conduct of the institution in which he collaborates, but maintaining his mental independence and critical spirit in relation to developments or advances in the science or technique under study in your teaching work.
Sanctions
The code of ethics of the accounting profession contemplates that the professional who in any way fails to comply with the established guidelines, is subject to sanctions imposed by the professional association to which he belongs, considering the seriousness of the fault committed in such a way as to avoid affecting the prestige and stability of the accounting profession in general. According to the seriousness of the offenses, the sanctions can be: private reprimand, public reprimand, temporary suspension of your rights as a partner, expulsion of the referee, and even criminal proceedings before the competent authorities.
Conclusion and additional reflections
The code of ethics guides the actions of the accounting profession by providing them with standards of conduct. However, before the stage of changes that we are in the context of the fourth industrial revolution, it is pertinent to bring to consideration other aspects that in the future may reinforce the ethical behavior of accounting professionals in particular and in general to professionals and entrepreneurs in a context of increasing interaction with technology.
In this sense, the American government through the Office of the President of the United States (Executive Office of the President National Science and Technology Council Committee on Technology, 2016) published a study that addresses the moral dilemmas of the Fourth Industrial Revolution. On the one hand, this study highlights that the Fourth Industrial Revolution involves the development of artificial intelligence in one aspect, and in this sense, the need arises to define an artificial intelligence ethic and for these objectives, 4 initiatives are highlighted in the subject:
- In 2016, the Carnegie Mellon University of the United States announced the creation of a Center for Studies for the Ethics of Artificial Intelligence. Under the Obama presidency, the White House has fostered dialogue on the challenges facing the future development of artificial intelligence. Currently tech giants like Facebook and Google have announced an alliance to develop an ethical framework for artificial intelligence. And noted scientists like Stephen Hawking (died March 2018), ElonMusk and others are reported Experts have signed a letter calling for global efforts to ensure that the use of artificial intelligence is beneficial to society.
In turn, the aforementioned study addresses the origins of ethics and, in this sense, it is mentioned that Ethics whose origin emanates from philosophy or religion does not currently fit easily into the world of technology. In this context, the analysis explains that from philosophers like Aristotle and considering the Ten Commandments, among other precepts, they are currently the main ethical guidelines (personal choices) and morals (principles, norms) for humanity, but that at the time of transferring them to technology systems through the development of artificial or non-human intelligence through robots, dilemmas and difficulties arise in applying these guidelines.Finally, this study also highlights that if it is borne in mind that it is sometimes difficult for human beings to develop the virtues of their own behavior taking into account the known principles of ethics and morals, it is a fact that the construction of virtues for them to be developed autonomously by new technologies, given that, for example, in artificial intelligence, the algorithms of machines would be those that would replace people's emotions, or for example, self-driving vehicles would represent a risk for Jobs of thousands of people who are dedicated to driving cars, trucks and various means of transportation.
In addition, and to conclude this reflection on professional ethics, it is noteworthy that the World Economic Forum (2016) published in this context a study entitled "Values and the Fourth Industrial Revolution: Connecting the Dots Between Value, Values, Profit and Purpose" (Values and the Fourth Industrial Revolution: Connecting the Points between Value, Values, Profit and Purpose), a document that has been the result of the effort of the Global Agenda Council on Values of the World Economic Forum and in which the development of an International Social Pact that is based on three basic pillars: human dignity, common good and co-responsibility. The World Economic Forum explains that society worldwide is currently facing the titanic task of creating decent living spaces for more than 1,500 million more people here by 2050, while at the same time this challenge requires addressing energy efficiency and respect the crucial ecological limits of the planet. In this context, the document affirms that with the start of the Fourth Industrial Revolution (powered by robotics, artificial intelligence, and nanotechnology), human progress could either suffer a setback in its development or undergo a positive transformation. On the other hand, the aforementioned document indicates that, to achieve the best possible society in the future, the following aspects must be guaranteed: design of cities with adequate infrastructures;promote an ecologically sustainable society; design transport systems focused on people and not on vehicles; and guarantee universal access to the Internet. Therefore, the document also highlights that full employment and human development is essential for a sustainable society, and in this sense the following 3 guidelines are mentioned in this area:
- Common good in employment: guaranteeing gender equality and job opportunities for women; as well as recognizing human potential and talent in any context. Human dignity in employment: ensuring that employees also fulfill their family activities and responsibilities; and that they always act ethically in all activities, both at work and outside of work. Co-responsibility in employment: That companies develop both business and labor practices that are environmentally sustainable; and the constant development and drive of innovation to face the environmental challenges of the future by efficiently managing the consumption of finite or non-renewable resources.
References.
Mexican Institute of Public Accountants (2018). Professional Code of Ethics. 11th. Ed. Mexican Institute of Public Accountants.
International Federation of Accountants (2018). Handbook of the International Code of Ethics for Professional Accountants. International Ethics Standards Board for Accountants.
Executive Office of the President National Science and Technology Council Committee on Technology (2016). Preparing for the future of Artificial Intelligence. Executive Office of the President, National Science and Technology Council, Committee on Technology.
World Economic Forum (2016). "Values and the Fourth Industrial Revolution Connecting the Dots Between Value, Values, Profit and Purpose". Global Agenda Council on Values. Davos: World Economic Forum.
