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At the heart of the chartered accounting profession lies a fundamental duty to be straightforward and honest in all professional and business relationships. Chartered accountants are trusted to uphold the highest ethical standards. When a member fails to maintain integrity, the impact can reach far beyond personal consequences, affecting public trust and the profession’s reputation.

“Integrity is not just part of being a chartered accountant, it’s what defines it,” says Rebecca Stickney, leader of CA ANZ’s professional conduct team in New Zealand. “It is a sacrosanct provision in the code and the most critical principle that members sign up to.”

Kate Dixon, leader of the professional conduct team in Australia, says acting with integrity is critical in all career stages and in all interactions.

“From the moment you become a provisional member and continuing through into retirement, whether you are providing public accountancy services or engaging in other business interactions, being a chartered accountant means upholding a lifelong commitment to the fundamental principle of integrity.”

In a recent case, the Disciplinary Tribunal found that a member was not straightforward and honest in his professional and business relationship with an investor. The member was knowingly associated with information which he believed contained a materially false or misleading statement, or contained statements furnished recklessly.

The tribunal highlighted the member’s failure to appropriately explain the nature of the investment and to be clear that the subject matter of the investment had no inherent value. It found this conduct was in breach of the fundamental principle of integrity and the CA’s membership was terminated.

Ethics beyond the office

The obligation to uphold the highest ethical standards extends beyond your work as an accountant. The Disciplinary Tribunal recently dealt with a case where a provisional member was found to be cheating during academic assessments.

“This provisional member’s membership was suspended for two years as a result of using a mobile phone on multiple occasions during assessments. The member was found to have breached the fundamental principle of integrity and to have engaged in conduct unbecoming a member,” says Dixon.

Integrity also needs to be demonstrated when dealing with CA ANZ, the New Zealand Institute of Chartered Accountants (NZICA) and the disciplinary bodies, she says. Last year, there was another case in which the Disciplinary Tribunal found, among other things, that the member had breached the fundamental principle of integrity.

“The breach of integrity finding was because the member kept making assertions that he had supporting evidence for his case, which he was directed to provide and never did. Therefore, the tribunal made an inference that either the information didn’t exist or it didn’t assist the member in the way that he’d said it would, and saw that as an integrity breach because the member was being misleading.”

Adding fuel to the fire

Stickney says members need to be careful not to double down on false or misleading information or statements, “or attempt to cover up mistakes”.

“Mistakes or errors can happen,” she says. “Being upfront about such issues shows a member’s professionalism and will be seen as mitigating if a complaint is made, whereas not being forthright is aggravating and usually results in a serious sanction and findings of misconduct or conduct unbecoming a member.”

There are also cases where members breach the principle of integrity by virtue of omission, sometimes because information is provided recklessly or without being thought through.

“Complaints where this issue arises include where members fail to provide accurate information in responding to annual declarations, CPD [continuing professional development] logs or the practice information questionnaire submitted as part of a practice review. For example, failing to disclose the performance of assurance services, the operation of trust accounts, holding of fiduciary positions or convictions.”

Conflicts of interest

Stickney adds that integrity is also about having the strength of character to act appropriately even when facing pressure to do otherwise, or when it might create potential adverse personal or organisational consequences.

Members need to be alert to where their own interests might conflict with those of another and be careful to disclose relevant information or interests, she says.

Stickney recalls a case where a member was both employed in a large firm and was a trustee of a charitable trust.

“The member provided investment management services to the trust, and was a director and shareholder of an investee company. His integrity breaches included charging the charitable trust for attendances as a director when those services were provided principally for the benefit of his investment entity.

“Additionally, the internal independence declarations submitted to his firm were false and misleading in that they omitted to disclose his interests, so there was a range of misleading behaviours which amounted to a breach of the integrity provisions.”

The member was suspended for 12 months and his fellowship status was revoked. An adverse costs award of NZ$20,000 was also imposed.

Ethics guidance

Stickney urges members to remember that CA ANZ has professional support avenues which members can use to discuss challenges, before they commit to doing something they have doubts about.

“The code also includes a pathway to help members understand their legal obligations, specifically through the NOCLAR [non-compliance with laws and regulations] provisions. The consequences of misinterpreting or overlooking these can be serious, so it’s essential to take a moment and ensure you’re on the right track.

“When faced with a dilemma, ask yourself, how bad is it if I say no? There are always people to talk to within the profession who can provide a sounding board.”

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Here to help: the CA Advisory Group

Remember, if you’re unsure about your ethical responsibilities and need advice on managing a conflict of interest or you’re facing disciplinary action, you can contact the Chartered Accountants Advisory Group (CAAG), a confidential support service of senior professionals who can assist you with ethical and professional challenges. To find out more click here.

Take away

Need to refresh your understanding of the code of conduct and the ethical expectations of CAs? CA ANZ offers a variety of courses that count towards your CPD and can help improve your knowledge. Search ‘Ethics’ here.

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FAQ

Why are ethics important in accounting?

Ethics are essential to building trust, ensuring clear financial statements, accurate reporting and maintaining the reputation of the accounting profession.

What are some examples of integrity breaches?

Integrity breaches can arise in a number of ways, including dishonesty, intentional acts of deception and the creation of misleading statements or documents.

What action can I take when faced with an ethical dilemma?

CA ANZ has professional support avenues available to discuss potential challenges. Contact the CA Advisory Group for confidential advice from a senior CA.

Where can I find further information on the CA ANZ code of ethics?

Further information about the current Codes and Standards can be found on the CA ANZ website.