Barry McCall speaks to Níall Fitzgerald, Head of Ethics and Governance at Chartered Accountants Ireland, about the findings of recent trust and ethics surveys commissioned by Chartered Accountants Worldwide and the Consultative Committee of Accountancy Bodies.
New research carried out by Chartered Accountants Worldwide and Edelman Data and Intelligence (DXI) has found that trust in the accountancy profession remains strong after the turmoil of the COVID-19 pandemic.
The study found that business decision-makers around the world consider Chartered Accountants among the most trusted professionals, catching up to doctors, engineers, nurses and teachers, and ahead of other prominent groups in society such as legal professionals and politicians. Furthermore, Chartered Accountants are the most trusted finance professionals ahead of bankers, financial advisors, economists, and insurance brokers.
Edelman DXI began working with Chartered Accountants Worldwide in 2018 to track the attitudes of senior decision-makers (e.g. CEOs, directors, heads of function, etc.), but this marks the first time the results have been made publicly available. The 2021 study surveyed 1,450 business leaders across the Republic of Ireland, Northern Ireland, England, Scotland, Wales, South Africa, Australia, and New Zealand.
“There is a lot to be proud of in these findings for the Chartered Accountancy profession in Ireland,” says Níall Fitzgerald, Head of Ethics and Governance at Chartered Accountants Ireland. “The results point to an opportunity for Chartered Accountants to use their position of trust to tackle the challenges of the recovery after COVID-19 and build towards a sustainable future.”
Among the key results of the research was the finding that performance on integrity has improved since 2019. However, scrutiny has also increased, with transparency more important in driving trust in Chartered Accountants.
Chartered Accountants are also rated highly as business professionals. Most business decision-makers (84%) believe that Chartered Accountants have the skills and expertise to make businesses thrive today. Meanwhile, 81% are confident in Chartered Accountants’ ability to navigate a new operating environment in the future.
At the same time, there is a growing expectation that they must also follow up with action. Overall, 85% of business decision-makers say it is important that Chartered Accountants demonstrate a track record of helping businesses thrive.
Most respondents (70%) see Chartered Accountants as credible spokespeople on societal issues such as sustainability, diversity, equity and inclusion. But they also expect Chartered Accountants to follow through by driving sustainable environmental practices within businesses and doing more to foster diversity, equity and inclusion practices.
Speaking at the global launch of the study in November, Chartered Accountants Worldwide chairman Michael Izza said: “Chartered Accountants are the first port of call for many businesses and saved many livelihoods during the pandemic. Over the next ten years, Chartered Accountants will play a leading role in tackling critical problems, including climate change, which is one of the biggest challenges humanity has faced. As problem solvers, Chartered Accountants can be counted on to find solutions to the world’s most complex economic and moral issues, including global warming and net-zero.”
But the profession still has some work to do if it is to play that leading role on those critically important issues, according to Fitzgerald. “We can, of course, be proud of the results, but we have to be realistic as well,” he says. “When you drill down into the detail of the findings, you find that the most strongly positive results were about the ‘bread and butter’ activities, the things accountants are meant to be good at anyway.”
He adds that being great at everyday things will not be enough in the new post-COVID decarbonising world. “Chartered Accountants are rated very highly for activities like accounts preparation, tax returns, data analysis, and general business advice, which we are trained for. Those are all things we are supposed to do, and while it is good to be held in high regard for them, we must ask ourselves why our core skills are not seen to be transversal into other important areas for business.”
Those areas include adopting transformative new technologies like artificial intelligence and all aspects of the environmental, social and governance (ESG) agenda.
“We need to up our game when it comes to those areas,” Fitzgerald continues. “At the moment, Chartered Accountants are not seen as the go-to people for ESG issues, diversity and inclusion, or becoming purpose-led as an organisation. While 60% of respondents said accountants had some part to play, no one said we were integral to the process. We might think we are, but others don’t. We need to work on that.”
He doesn’t believe that should be viewed entirely negatively, however. “There are some very real opportunities opening up with the advent of new sustainability reporting standards and other regulations,” he notes. “These things are all about data and measurement, and those are things accountants are very good at. They are also very good at technical standards and translating them into processes and so on.”
Fitzgerald also believes that the profession needs to reposition itself to capitalise on those opportunities. “Finance professionals in future will have to be seen as solutions providers in a wide range of areas. Large organisations seeking advice on their sustainability journeys can get it externally, but SMEs don’t have the money for that. So they have to look internally, and who better than their head of finance or external accountant to guide them on where they need to go? Sustainability has a direct bearing on finance, after all. For example, in the future, companies will find it very difficult to get bank loans or access investment capital if they are not on a verifiable sustainability journey. Accountants have the skills to do that. We are very good at taking standards, putting them into practice, and giving investors and lenders the assurances they need in many areas. In future, that will apply to sustainability as well.”
Fitzgerald also points to another recent report from the Consultative Committee of Accountancy Bodies (CCAB), which surveyed accounting professionals in Ireland and the UK. It found that 27% had been put under pressure, or felt under pressure, to act in an unethical way in the last three years.
The most common instances related to over-optimism concerning budgets and business cases, unreasonably downplaying risks in budgets, and categorising personal expenses as business expenses.
In most cases (78%), the accountants concerned spoke up to prevent pressure to break the ethical code. Just 10% of those under pressure carried out the unethical task, while 25% did so but only partially. Interestingly, those figures correlate strongly with the 35% who said they didn’t turn to anyone for support or guidance.
Fitzgerald advises any Chartered Accountant who feels under pressure to act unethically to reach out for help. “Chartered Accountants in Ireland have a fantastic network of 30,000 fellow members to call upon for assistance in cases like this,” he says. “Many will have encountered similar situations themselves and will be able to offer very practical advice. We also have resources on the Institute’s website, which provide guidance on reaching an ethical decision.
“Generally speaking, the advice is to look after the small things before they grow. For example, don’t overlook things like overstating mileage. A disciplined approach to such things will help create a culture where the pressure to act unethically doesn’t arise.”
Níall Fitzgerald is Head of Ethics and Governance at Chartered Accountants Ireland.