Ethics – a rare commodity

“A man without ethics is a wild beast loosed upon this world” – Albert Camus

Based on the recent events in South Africa, ethics should be a buzzword you are quite familiar with. South Africa, specifically the audit industry, has been rocked by two major scandals in the recent past, which was both caused by the same root problem – a lack of ethical behaviour. The results of which had severe consequences for a lot of South Africans.

In both of these scandals, a range of professionals was deemed to be at fault for the lack of ethical behaviour. Numerous questions were specifically raised regarding the role that the registered auditors and chartered accountants should have fulfilled in the prevention of the unethical behaviour which occurred. The questions raised made it quite clear that there’s a degree of uncertainty in the business world regarding the exact responsibilities of the accountants and auditors in business.

Chartered accountants and registered auditors are both required to adhere to the “Code of Professional Conduct for Registered Auditors” (The Code). The Code prescribes the fundamental principles to which the professionals need to adhere, in order to meet the ethical requirements of the profession when providing any audit services. The fundamental principles are as follows:

1. Integrity – to be straightforward and honest in all professional and business relationships.
2. Objectivity – not to compromise professional or business judgements because of bias, conflict of interest or undue influence of others.
3. Professional Competence and Due Care – to:

• Attain and maintain professional knowledge; and

• Act diligently and in accordance with the applicable technical and professional standard.

1. Confidentiality – to respect the confidentiality of information acquired as a result of professional and business relationships.
2. Professional Behaviour – to comply with relevant laws and regulations and avoid any conduct that might discredit the profession.

As with most things in life, acting ethically is easier said than done. The South African Institute of Chartered Accountants (SAICA) has strived to promote ethical behaviour by incorporating the Code as part of the study material on university level for all chartered accountants. The Code thus seems to be adhered to on a theoretical level, when there are consequences of not adhering to The Code. In practice/business, however, the incentive and possible financial gain seem to outweigh the consequences of not adhering to The Code, which causes unethical behaviour to become quite rewarding.

In essence, we strive to deliver excellent service to our clients through the following ethical behaviours:

1. Integrity – we strive to be transparent regarding the costs and requirements of an audit before commencing with any work, and not recoup costs which were not communicated to our clients.
2. Objectivity – we ensure that clients are serviced by personnel who are independent of the clients and have no financial interest in the client.
3. Professional Competence and Due Care – we ensure that the audit personnel stay up to date with the latest amendments in the auditing industry by providing regular training to the personnel and ensuring that new personnel have a mentor to guide them.
4. Confidentiality – we ensure that all client information is safeguarded and only shared with the audit team and personnel for whom it was intended.
5. Professional Behaviour – we strive to act and dress in a professional manner at our clients’ premises and by doing so we ensure no disrepute to the client or the profession.

Link to the Code of Professional Conduct

https://www.irba.co.za/upload/16 IRBA Code of Professional Conduct – ED Final 20 November 2009.pdf

This article is a general information sheet and should not be used or relied upon as professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE).