Tripping over the ethical code
Once again staff of a Big 4 firm are up in front of the beak for breaches of the ethical code. In this case ten junior members of PwC audit staff have been reprimanded by the ICAEW and required to pay costs of £2,107 each apparently for sharing answers to an assessment in a group chat. Two assessment answer documents were created, amended, used and shared between members of the group.
This is probably not entirely unexpected. School children often share answers to their homework, university students plagiarise answers or pay to have them written by someone else (often badly) so why should professional trainee accountants be any different? The answer is because they are professional trainee accountants and are expected to act at a higher level than a school child or lazy university student. They have a code of ethics which they are expected to abide by and incidents like this tend to indicate that this is not being taken seriously enough. Whether this is firm wide or profession wide is another issue. PwC is not the only Big 4 firm to have its staff embroiled in unethical practice – some of them at partner level – so does this indicate a wider malaise or simply a few ‘bad apples’?
One question which might be asked is this. When interviewing potential candidates or carrying out staff appraisals is any thought given to the psychology of the individual or is it all about results? Some years ago a small research study was carried out among law students at law faculties across UK. The study used a questionnaire devised from three recognised psychological scales which were
- Mild Social Deviance Questionnaire (West, Elander & French) - cheating
- Aggression Questionnaire (Buss & Perry) – behaviour in social settings
- Hypersensitive Narcissism (Hendin & Cheek) – self regard
The idea was to examine the motivations and morality of these students. The conclusions were quite revealing.
- There was a high correlation between those attracted to the law because it was high status and mild social deviance
- There was also a very high correlation between hypersensitive narcissism and mild social deviance
What does this mean? What it revealed was that for these students studying law they
- Perceived the law to be a high status profession and are attracted to it for that reason.
- Had a high sense of their own importance
- Had little interest in the law for altruistic reasons (e.g. to defend the weak and vulnerable)
- Saw nothing wrong with cheating a little if it benefited themselves – they might have a ‘flexible’ sense of ethics
The significance of this for firms employing these students was likely to be
- Many of the trainees being recruited had strong feelings of self-importance which were not matched by a strong ethical commitment.
- They might see ethical rules as being something to conform to unless there was a less ethical alternative which would benefit their client and/or themselves
And there you have it. For law students can we substitute accountancy trainees – particularly those working for what are seen to be prestigious Big 4 firms where competition is rife and promotion is results based?
Time and again the Institutes and good practice reinforces the need to continually promote and encourage strong ethical practice in the organisation. However this may be more in the breach than the observance if individuals are being employed who see nothing wrong with a little mild cheating.
So maybe selection procedures and staff appraisals should start looking at some psychological issues rather than simply whether or not the audit was brought in below budget or bills went out on time.
John Taylor is an author for accountingcpd. To see his courses, click here.
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