Accounting body president gives integrity a lot of credit

Sam Wong is clearly a busy man. As worldwide president of the Association of Chartered Certified Accountants (ACCA), he says he has only spent two days in the past month at home in Hong Kong, with much of this due to the extensive travelling which his role involves.

In Ireland earlier this week to attend the graduation ceremony of ACCA students here, it is little surprise that he looks tired but enthusiastic as we sit down to talk in a Dublin hotel.

Mr Wong (50) is a man who enjoys every minute of his position at the head of an accountancy body with almost 300,000 members and students in more than 160 countries worldwide.

He finds events like the graduation ceremony a great opportunity to meet association members. It is important, he adds, for the president to be able to exchange ideas and views with ACCA's membership.

He points out that at least half of ACCA's membership is female, thereby giving the lie to the stereotypical image of accountants being somewhat dull men in grey suits.

In his own firm, Ernst & Young in Hong Kong, where he is a partner specialising in assurance and advisory business services, he estimates that 60-65 per cent of the workforce is female. He says this is to be welcomed as a means of providing balance in the profession, and differs significantly from 25 years ago, when he first embarked on his career.

It also ties in with what he sees as one of ACCA's core values, which is to provide access to any person, regardless of background, who wants to choose accountancy as a career.

The profession has, however, undergone some testing times recently. Scandals such as the Enron fraud and the associated investigation of Arthur Andersen, have meant that public confidence in the profession's ability to provide accurate and independent accounts has, at the very least, been shaken.

Nevertheless, and perhaps unsurprisingly, he says accountants were not the only ones to blame. Any situation where earnings are misreported is influenced by a lot of different people, including members of management who may not be accountants themselves.

Indeed, he believes that because many chief financial officers in the US would hold MBA's rather than accountancy qualifications they would not necessarily be as stringently trained in the basic techniques of accountancy as they could be .

"I think the basic important attribute of any profession must be integrity," he says. "Be you an accountant, be you a lawyer, be you a medical practitioner, integrity comes first.

"This happened so many times in the US simply because of the corporate greed coming from these share options schemes," he believes. "Also because of the peculiar characteristic of the US corporation having the chairman and the chief executive - they are actually employees of the multinational companies, they are not the founders of these companies like in most of the Asian corporations.

"It seems that probably [problems arise] because of the structural environment surrounding the corporation in the US. And because of the corporate greed, because of the chairman and the chief executive and also the executive team being remunerated on a short-term basis by all these stock options."

On the difficult question of whether some of those involved in the Andersen case would have been members of ACCA, he responds matter-of-factly that this is unlikely, as ACCA members currently cannot practice in the US without sitting additional exams. He would like to see this changed.

Mr Wong also draws a clear distinction between accountants working in industry and those working in practice. Members working in practices might be partners in the firm, and would be aware that their liability is unlimited, he says.

If they were put in a position where they were encouraged to issue an opinion which they believed to be untrue, then he firmly believes the person involved would be only too aware that the downside would be so great, on personal and professional levels, as to make it not worthwhile to do so.

With this in mind, he says he believes the shredding of documents during the Andersen affair was unprecedented and a one-off. He also says that once this happened, Andersen's reputation lay in ruins, thereby illustrating perfectly the importance of integrity to any accountancy firm's business.

One important issue which Mr Wong would like to see addressed - and Ireland's upcoming presidency of the EU might present a good opportunity to do so - is the standardisation of accountancy qualifications. This is particularly relevant regarding the application of international accounting standards in the US, he says.

With close to two million accountants in the world, who historically have been trained according to different international accounting standards, he believes it is already difficult for some to change their mindset to comply with these international accounting standards.

In the US, he says, a "tick-box approach" often prevails, leaving many practitioners believing they will be litigation free once they follow certain rules, while perhaps disregarding more basic principals.

"Once you change accounting from rules to a principle basis, then you are opening up a lot of litigations. Whenever we are talking about principles, a lot of judgment calls come in," he says.

"I think practitioners [in the US] will be hesitant because of their culture, the legal culture of the whole society," he continues, before warning: "They will be very hesitant to change, because they will just be opening up to litigation."