Professional ethics and the cultural divide

It’s that time of year again and continuing professional education rears its head. Whilst the Institute of Chartered Accountants in England and Wales (ICAEW) is satisfied with my confirmation of compliance simply by answering one question on line the Polish Chamber of Auditors requires me to sit through 40 hours of lectures per annum and sign countless forms.

This year one of the available topics was the IFAC (International Federation of Accountants) code of ethics. The lecturer started off by saying that a professional code of ethics was the result of US accounting and audit scandals of the late 90’s. And there I was thinking that the first code of ethics was published by the ICAEW way back in the 19th Century. The reality was that all of the ICAEW training and exams which I suffered in the early 1980’s had as a point of reference ethics and doing the best for the client and society as a whole. Ethics was seen as a state of mind rather than a set of prescriptions.

Of course the UK has the benefit of a legal system which is based on what a passenger on the no. 11 bus would consider to be appropriate and inappropriate. Hence a few principles and examples suffice rather than the US and Continental approach of a three inch thick rule book which at the end of the day fails to guard against fraud.

The questions raised by my co trainees last week suggested that ethics is not something which has been inculcated with “mothers milk” with most of the questions and comments being about how to circumvent regulations. But then I reflected that the users, be they corporations, banks or government do not view Polish auditors as being a true profession, rather a necessary evil. I recall 23 years ago trying to convince a sceptical President of the Polish Association of Accountants that making the Polish qualification a general business qualification based around high standards and ethics would lead to attracting high quality graduates which could only enhance professional standing. The opposite has happened. Clearly evident in the marketing efforts of the Big4 which not surprisingly position themselves in Poland as business consultants and not as auditors.

I will end by stating that practically all FTSE 100 companies have Chartered Accountants on their main board. I would suggest that few Polish quoted companies have board members bound by a professional code of ethics, which although it does not stop fraud at least makes its perpetration more difficult to hide. I wonder who the “whistle blower” at Tesco was?