How Positive Working Environments Allow Ethics to Grow

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Maintaining strong working relationships is a challenge for any type of company, anywhere in the world. However, if ethics are to flourish in a business, it’s a positive and productive working environment that is needed.

The challenge for businesses is that there are two factors that often get in the way of a harmonious working atmosphere: the stubborn ‘I’m the boss and you should do what I say’ mentality from management, and the ‘it’s us against them’ approach from employees. If ethical practices are to bloom, these issues need to be quashed.

Ethics in Accounting

Accountants, like others in the world of business, are often faced with ethical dilemmas. For example, periodic profits may lure a business’ management into twisting accounting rules to inflate calculated net income. In this case, technical know how would make you aware of the problem, forcing you to make an ethical decision regarding the business’ actions.

These types of ethical dilemmas appear to be becoming more prominent in the business world. The number of CEOs fired for ethical lapses has climbed dramatically over the last decade. According to accounting and consulting firm PwC, who collected the data, the number of CEOs fired for ethical reasons has doubled in the US and Canada, and in Brazil, Russia and India the figures have nearly tripled. Globally, dismissals for ethical lapses have risen from 3.9% (2007-2011) to 5.3% (2012-2016) – a significant increase.

Governments, investors, the media and boards of directors are holding CEOs to a far higher level of accountability for corporate fraud and ethical lapses than they did in the past. This could very well be part of the cause of the increase in CEOs dismissed. Some high profile cases include the bribing of government officials, and banks defrauding customers. It goes without saying that when unethical behaviour takes place, it certainly affects a brand’s reputation – trust is lost and doubts are formed.

James Ratley, President of the Association of Certified Fraud Examiners (ACFE), believes accountants need to stress the importance of ethics in the workplace to succeed in discouraging financial fraud. He explained at a recent conference how he gets calls where a person at work has noticed internal controls have not been followed by a business – a red flag of potential fraud.

At the ACFE, James has implemented strict ethical policies which he believes will encourage employees to keep their integrity. He has also introduced a stern policy against harassment and bullying, and promotes personal finance by making sure all employees are able to cover their monthly expenses.

James advised: “If the organisation you work for does not have the ethical structure you want, it’s time for you to move on.

“The only way you’re going to be able to stay there is to change your ethical makeup and that’s not the right answer.”

Common types of unethical behaviour frequently observed in the workplace include the misuse of company time, abusive behaviour, theft, telling lies and violating company internet policies.

It is an employer’s job to be consistent with their employees, suppliers and clients as inconsistency causes doubt; trust is a huge part of an employee-employer relationship. If an employee doesn’t feel appreciated and comfortable at work, bad ethics are more likely to follow than if there were a positive working environment.

Accountants need to gain the confidence of their clients and this is where ethical behaviour is necessary – not only to prevent fraudulent activities, but to make the client feel at ease. This gives accountants a considerable responsibility to the general public and to businesses they work with, because they have to advise them on making an informed decision about investment.

Ethics are taught in accounting courses at higher education institutions as well as by companies through training. Want to learn more about ethics in accounting? Get in touch and find out which accounting course might work for you via our contact us tab.

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