Profession is working to burnish its tarnished credibility after the high-profile scandals of recent years, writes Caroline Madden
As demonstrated by the political turmoil which kept the country in thrall over the past few weeks, having rather murky ethical standards can seriously undermine your credibility.
If anyone can identify with the battering the Government has taken recently, it would have to be the accountancy profession, whose own image was seriously tarnished at the turn of the century by the Enron/WorldCom debacles.
Since then, accountancy bodies have slowly but surely tried to rebuild public confidence in their ethical standards. The driving force behind this process has been the International Federation of Accountants (Ifac), the global organisation for the accountancy profession, which boasts 163 member bodies.
Ifac's ethics standards board has formulated proposals which these member bodies implement, based on five fundamental tenets - integrity, objectivity, professional competence, confidentiality and professional behaviour.
Addressing the Certified Public Accountants (CPA) annual dinner in Dublin earlier this week, Ifac president Graham Ward explained the importance of high ethical standards in all areas of business. "Probity and profitability go hand in hand," he said.
"Ethical conduct lies at the core of all business. We do business with those we trust, we get business from those who trust us."
He warned that companies that do not observe strict business ethics are more likely to suffer lower profits and an eroded customer base.
"Good governance and sound ethics have to be embedded within companies and grow from within, not force-fed from outside," he continued. "An open and transparent corporate culture breeds honesty and respect on the part of employees but corporate secrets on the other hand simply arouse suspicion and create and unhealthy corporate culture."
CPA president Pádraig O'Feinneadha emphasised the importance of business ethics in an Irish context.
"Ireland might have been spared high-profile ethical disasters like Enron, WorldCom and Tyco, but we cannot be complacent. Irish companies and advisers such as accountants have the responsibility to ensure that business in Ireland is transacted on an ethical basis."
Ifac has placed a big emphasis on creating public assurance that its ethics standards are appropriate, and so an independent body - the Public Interest Oversight Board (which has some heavy-weight international organisations on board, such as the World Bank) - has been established to monitor Ifac's ethical standards.
"It makes sure that the due process of our standard-setting boards for ethics and education is appropriate in the public interest," explains Mr Ward.
Mr Ward - who was given a leave of absence from his day job as partner in PwC in London to take up the presidency role - will come to the end of his two-year term next month, and is very pleased with the progress made by Ifac during this time. "Charlie McCreevy . . . said that he was now fully satisfied with the governance processes of our standards-setting board so I think being able to give people like Charlie that degree of confidence is very satisfying," he observed, adding that Mr McCreevy "has been a pleasure to deal with".
Mr Ward's extensive travels during his term as president have given him a unique insight into the current public perception of accountants and auditors.
"I've been to all continents, and seen politicians up to the level of the national president and prime minister, seen securities regulators, stock exchanges . . . investors in these countries, and the feedback that I get is that the processes that we've put into place and the way we've applied those processes is something they've appreciated and respected," he said.
"They have more confidence now in what it is we're doing and therefore in what individual professional accountants are doing than they had before."
Ifac has also established a developing nations committee which works in cooperation with the World Bank and advises developing countries on how to establish accountancy bodies.
"The theme I took for my presidency was 'accountants creating economy growth and stability worldwide' so I believe very strongly that a strong accountancy profession is key to a strong financial infrastructure within a country," Mr Ward said. "Unless you've got a strong accounting body, you're not going to get the trust of people - they're not going to have the confidence to make funds available to countries."
Ifac ran a Learning Workshop in Nairobi recently. Representatives from 17 African countries attended to learn more about growing the accountancy profession in Africa. "You need a strong accountancy body, a strong financial infrastructure to fight poverty," Mr Ward said.
In addition to setting standards for accountancy bodies, Ifac also operates an international public sector accounting standards board, which sets accounting standards for governments and other public sector organisations.
Australia is in the process of implementing these standards, as are New Zealand, Canada, the UN, the OECD and the European Commission. China, India and Pakistan are likely to be next on the list.
