Why do we need a code of ethics?

CIMA’s Insight e-zine (October) reported on  a new version of  CIMA’s code of ethics. According to CIMA, upholding an ethical code can most simply be understood as “doing the right thing when no one is looking.” As an accountants, are you sure you know your right from wrong in the workplace? (corporate fraud profiling shows culprits are most likely to be senior male executives in the finance function).

CIMA’s ethical code (and other professional body codes) is a tool to help guide ethical practice and is revised periodically  to reflect changes in the external environment and reinforce the ideal of professional duty. Most codes are principals-based, meaning there are no absolute rules. They are rather a roadmap of  a journey. So how is it applied in practice? Management (and other) accountants  have a position in society as trusted experts. They have a duty to maintain the highest standards of professionalism in their work, while acting in the public interest, by upholding the code and fundamental principles: in CIMA’s case these are: integrity; objectivity; professional competence and due care; confidentiality and professional behaviour. By not doing so, members can lose their professional standing.

With recent turbulence in the economy and financial markets, the failures of many companies can be traced to ethical breaches. It is no surprise that business ethics are very high in the minds of the public, regulators and governments, and that trust in professionals is at a low point.

As long as people work, ethical dilemmas in the workplace will always be present. Ethical grey areas and demands from misguided, or outright corrupt, peers and bosses remain a challenge to deal with.