“In their own words”…Dilemmas encountered - Formative experiences

In the following extract from the ICAS research publication “Speak up? Listen up? Whistleblow? In their own words – Insights into the ethical dilemmas of ICAS members” we hear from ICAS members about their real-life experiences of ethical challenges, “In their own words”.

"The way it was hammered into myself and the other apprentices that were going through it with me, it is either right or wrong and there are no fudges. And if you are a CA you do it right." (Extract from interview with Jonathan)

4.3 Formative experiences

Interviewees often recalled incidents that happened early in their careers that had been formative experiences that had stuck with them and shaped their subsequent actions or thought processes later in life. Logan referred to a case that happened around six years after he had qualified as a chartered accountant, one “where I guess I’d picked up on my ethical realism”. This case required Logan to trace money across a complex web of countries and accounts and gave him his “earliest exposure, if you will, to ethical situations”

During his chartered accountancy training with a large firm, Daniel recalled finding a payment to an investment company for some shares that had been processed as expenses whilst he was auditing a building business, which he had thought was unusual. The payment was not material but he had queried it and had been told that the payment had 34 been processed incorrectly. Then, “the next day they magically produced an invoice” for a different expense. He had made a note on the file for more senior members of the team to review but, as far as he was aware, no further action was taken. Then the next year:

"It so happened that I was on the same job the following year and the same thing came up and it was the return cheque or something for that same payment. And I realised it was obviously… it was made to whoever it said it was made to in the first place."

He had been quite disillusioned because:

"That always stuck in my mind, because I remember sort of feeling frustrated in a way that you could pick up somebody clearly fiddling the books or dodging the tax man or something, but you didn’t do anything about it because you didn’t want to lose your job."

Abigail also remembered an experience from her training days. An issue had come to light during an audit and the audit manager disagreed with the approach the audit partner wanted to take. The partner made it clear that he did not want the accounts to be changed:

"And the manager didn’t agree. He felt the points were material and the accounts should be changed. And the partner was saying, no, they weren’t going to be. And so, they had a bit of a raised voice shouting match in a big open area, and the manager said, ‘I am not signing them, because I don’t agree with it.’ And I think a lot of us – the place went silent. But I remember thinking to myself how brave that manager was, and I was really, really impressed with him."

Later in the interview, when discussing the need for people to be sensitive to different personality styles, she reflected on this situation and remarked that it would have been helpful for the manager to have known more about the tactics of dealing with such a situation:

"That manager, probably it wasn’t his ideal situation to be shouting at this partner or shouting at each other in front of the floor. If he could have gone away and thought, ‘I don’t seem to be getting my point over here, why is that? Can I reflect on what I know of the partner, what is his style? Is there a way I could say this, could I get somewhere?’ Because I suspect if he’d been able to draw on some experience like that then, maybe the issue could have been resolved. It’s just how you should raise it - and that can make a difference. "

The complex moral dilemmas involved in seemingly clear-cut instances had struck Ben early in his career. He remembers the first embezzlement case he came across at a garage:

"And it was a woman who took out duplicate invoices and renumbered them and got rid of them or changed them. I don’t know how we found out but anyway she went to jail and that was when I started thinking, you know, we’re there as accountants, we’ve found this, and that woman who has a family has gone to jail. And I had to think about that, whether it was the right thing that we did."

On leaving professional practice after qualification for a job in industry, Jonathan recalled that:

"There was one issue where one of the (and I was a lowly accountant at that time), one of the directors insisted that payments were made on his behalf to (name deleted). And I refused to do that because they were obviously nothing to do with the company. That created mayhem but internal mayhem. And my boss the Finance Director - he was also an ICAS member - at that time said it was just as well I had refused to make the payments because if I had made the payments then it would have been my blood that was on the line. So that was obviously an endorsement of my stance and to some extent a salutary lesson."

There was therefore a strong, commonly-expressed, feeling that some experiences relatively early in a person’s career could shape their outlook and ethical mind-set. This points to the importance of careful selection of both training firm and subsequent first move after qualifying. For Laura, her training experiences and first move on qualification were key elements in her career:

"I think I’ve reflected recently that the organisations where you spend your first 3-4 years out of university are really formative in helping you have a foundation of what you expect is good in business and so my formative years were spent at (two accounting firm names deleted)… they’re structured, they’re focused, there is a clear strategy, there is clear leadership, people are accountable for their time, they’re accountable for their deliverables and because I guess of the way in which people come into those organisations and have an expectation about career progression and development, similarly there are expectations about how behaviour performance is managed… The biggest change I think comes from when you move into industry and I think your first role out of consulting or accounting is the shock because that’s when you begin to see things don’t run like clockwork."

In a series of extracts from the research hear from ICAS members about the real-life situations they have faced -  “In their own words”.

Hear more about the key findings from the author of the research Catriona Paisey, Professor of Accounting, University of Glasgow

Hear more about the key recommendations from the author of the research Catriona Paisey, Professor of Accounting, University of Glasgow

Hear from Norman Murray, Past President of ICAS and Past Chair of the ICAS Ethics Board

Hear from James Barbour, ICAS Director, Policy Leadership