Telling the truth about SME life today

Despite spate of high-profile scandals, accountancy sector is still not squeaky clean

Simon Wright, operations director at, is of the belief that industry bodies, alongside the government, have been proactively looking at ways to mitigate risk against “another Enron” happening. 

“In the UK, there has been a spate of legislative measures including the Companies Act 2006 requiring each director ‘to exercise reasonable care, skill and diligence’, The Bribery Act 2010 and more recently the Enterprise and Regulatory Reform Act 2013’s Whistleblowing legislation,” he said.

Meanwhile member associations and institutes have identified certain ethical principles as being of crucial importance to the profession. However, ethics tokenism (simply identifying and articulating them) is not enough. In order to put them into practice, organisations need to adopt values that will adhere to the principles and maintain the confidence of stakeholders.

The scope of the problem was highlighted by’s annual study, which asked more than 1,700 accountants across the globe, including analysts, audit seniors, risk managers and CFOs, which revealed that 48 per cent of accountants had either been pressurised (or knew of someone that had) by a manager or partner to ignore an adjustment that should have been made to a set of accounts.

Some 20 per cent of respondents believe between ten 20 per cent of those in the profession have helped clients create a set of accounts that are deliberately misleading. A further ten per cent believe more than a quarter of the profession have been acting unethically, while five per cent believe half of the profession are not acting with integrity over client accounts. 

Furthermore, nearly half (49 per cent) of respondents have known of a specific situation where a colleague has been pressurised by a line manager or a partner to ignore an adjustment that should have been made to a set of accounts.

The majority (53 per cent) believe that senior staff members within their organisation do not appear to act independently from the commercial pressures faced by the business.

Despite knowing that such practices are going on, it seems that those in the profession may not want to come forward on the grounds that whistleblowers are not being protected. Three quarters of accountants believe that if an employee reports the conduct of a colleague, the organisation does not do enough to ensure the whistleblower is protected against victimisation or dismissal. Furthermore, nearly two thirds of accountants do not believe that employees are protected from victimisation or dismissal if they report the wrongdoing of a client.

Marc Jones, partner and employment law specialist at Turbervilles Solicitors, said: There is a strong call to action for employers to make sure they have a publicised whistleblowing policy in place to ensure that staff are not fearful of exposing unethical practices and protect them if they ‘blow the whistle’. Otherwise, it’s a catch 22 situation where staff remain quiet and not  “rock the boat” and avoid possible victimisation, whilst other staff leave behind a trail of unethical practices.

If not already in place, employers should strongly consider drawing up clear ethical policies so staff are aware of when they may be ‘crossing the line’ the penalty for breaching this and the importance of disclosure. At the same time, employers also need to create an environment where staff are encouraged to come forward should they suspect unethical behaviour has or is taking place.


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