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By Sonakshi Babbar

In John Grisham’s The Firm, a young lawyer faces the dilemma of exposing his firm’s illegal practices. Although legally skilled, his real challenge is acting ethically. Similarly, for chartered accountants acting ethically is not always as simple as just reading the code of ethics – it’s about putting it into action.

Clare Payne, ethics, trust and transparency leader for EY Oceania, says that, like lawyers, accountants are held to a high ethical standard. “People rely on the services of accountants, and they need to trust in the standard of work and the individual practitioner.”

This places a significant ethical responsibility on chartered accountants to ensure their work is not only legally compliant, but also ethically sound.

Ethical decision making is central to the accounting profession, with serious consequences for both individuals and companies. The results of unethical behaviour can be devastating, especially in the digital age.

Payne says, “There’s the risk of loss of reputation and professional opportunities. Some people may never work again. You can, quite simply, lose everything.”

For CAs, ethics aren’t just a professional obligation, they’re key to long-term career survival.

Five ways to practise ethical decision making

Payne suggests developing an ‘ethical muscle’, which, like physical exercise, becomes stronger with practice. “If people practise ethical decision making, it becomes second nature. They get comfortable with the language of ethics, listening to other perspectives and being able to articulate the rationale for a decision.”

She recommends five simple yet effective strategies:

1. Put public interest before self-interest

Payne points out that navigating ethical waters can be difficult for CAs, especially when they are working with others who don’t have the same professional obligations that are attached to being a CA. She suggests CAs must prioritise the public interest and their profession over self-interest. “The code of ethics provides guidance on these obligations and expectations.”

2. Recognise cognitive bias

Payne says that everyone faces the challenge of having biases that can impair their decision making. “I believe we can improve our decision making and reduce the negative impact of biases by becoming more aware of our own biases and understanding how they can impact our decisions.”

3. Speak the language of ethics

Payne contrasts typical business language with the language of ethics: “People are adept at speaking ‘business English’, using terms such as ‘the business case’ and calculating a ‘return on investment’. She explains that many of these standard business terms are absolute, whereas ethical language is more about inquiry, using phrases like ‘should we?’ or ‘is it right?’. These questions encourage a necessary pause before action.

4. Apply the sunlight test

A helpful tool Payne suggests is the ‘sunlight test’ where you can ask yourself, ‘how would I feel if my decision was made public?’. Adds Payne: “I also think of this as ‘the Fin Review test’, where you imagine how you would feel if your decision was on the front page of a newspaper. “Another question that can enhance ethical decision making is to ask, ‘how would I feel if I was on the other side?’,” she says.

5. Address bad decisions swiftly

Payne encourages people to realise that it’s OK to make mistakes. “The sooner something is addressed, the better.” When CAs find themselves on the wrong side of an ethical decision, she advises swift and open communication: “The best thing someone can do when they realise they’ve made a bad decision is to speak to someone, preferably someone who has the authority to assist.”

CA ANZ provides support for members through the Professional Standards teams in Australia and New Zealand, and the CA Advisory Group. Many organisations, including EY, also offer formal support systems like ethics officers and anonymous ethics hotlines.

Register to watch a complimentary ethics webinar on 16 October

Clare Payne will be part of a panel discussion broadcast on Global Ethics Day (16 October 2024), with Ainslie van Onselen, Kea New Zealand consultant Craig Fisher FCA and BDO partner – quality management, Willem Olivier CA (SAICA).

The panel’s discussion topic is ‘Understanding Biases in Decision Making: Empowering Ethical Judgements and Culture’. This webinar can contribute up to one hour of verifiable ethics CPD for CA ANZ members. Get more information about the event and register here.