Tuesday, December 04, 2007

ICAS ethics to teach accounting students best ways of embezzlement

Standards at ICAS, the Institute of Chartered Accountants of Scotland have never been lower, as story after story reveals concerted cover ups of significant frauds, poor client service, negligence, and corruption.

From international money laundering to drugs misuse to embezzlement and even theft of pensioners pension & bank books, senior members of ICAS have made a name for themselves in recent years by covering up the worst crimes of Scottish accountants ...

Time to train a new generation on how to defraud the client ?

The Herald reports :

ICAS ethics course should help students set shining example


The first batch of students to complete the Institute of Chartered Accountants of Scotland pioneering business ethics course are to be unleashed upon the world early next year. The course is unique among accountancy training programmes in that it exposes students to a range of challenging real-life ethical dilemmas and was put together by a former partner of a Big Four firm who is also a practising minister of the Church of Scotland.

ICAS became the first professional body to incorporate a fully-fledged business ethics course into its three-year training programme in September 2005.

The move was partly a response to the damage wrought to the accountancy profession's reputation as a result of the collapse of Arthur Andersen in 2002. For many accountants, the end of Andersen, which was found guilty of shredding documents relating to its client Enron in 2002, spoke volumes about the need for higher standards of ethics in the profession.

David Molyneaux, who helped create ICAS's business ethics course, said the collapse of Andersen jolted the profession out its complacency. "That certainly concentrated minds. The professional and training bodies realised that they could no longer get away with simply assuming that everyone was going to be ethical."

ICAS's training programme did previously have an ethical dimension but two years ago, in the wake of the Enron scandal, it decided that this was insufficient.

Mark Allison, ICAS's director of education, said: "ICAS was the first institute in the world to introduce a dedicated business ethics course; we are the only institute to teach it through an educational programme; and we are the only institute to use real-life case studies and to assess those case studies. The goal is to set the gold standard for ethics and ensure that our members have a major influence on the ethical behaviour of the business community."
The goal is for students to have enquiring minds and not leap to judgment

The course includes two full days of ethical education, which is ring-fenced from technical work. The course aims to dissect concepts such as truth and honesty by considering scenarios unrelated to accounting, such as Jonathan Aitken's infamous battle with The Guardian, supermarkets' treatment of their suppliers and the testing of pharmaceutical products on human volunteers.

The course also uses role-playing to evaluate the practicalities of whistleblowing - for example, it covers what an accountant should do if they discover a colleague taking shortcuts or a client deceiving a regulator. Undertaken prior to the final test of ICAS's professional expertise stage, the course also involves writing a 2000-word essay. The goal is to encourage students to have probing minds and not to leap to making judgments.

"We want to ensure that chartered accountants will have a predisposition to challenge and question those around them," said Allison.

Molyneaux was a partner in Coopers & Lybrand's Edinburgh office from 1986-92. After a theology degree at Edinburgh University, he became a part-time Church of Scotland minister. His primary focus today is teaching ethics at Aberdeen University Business School. He drew up 28 case studies involving people facing ethical challenges for the ICAS course, as well as writing the final examinations and providing academic insight into the course.

Molyneaux, who still conducts services at St Machar's Cathedral in Aberdeen, said he was to an extent inspired by the parables. He said this is because "instead of coming up with answers, they raise difficult questions - then they leave listeners to make up their own minds."

Molyneaux believes it is "hugely important" that ethics are incorporated into accountancy training, not only because accountancy touches all aspects of society but also because accountants are often considered to be "guardians" - alongside judges, police and the military. They have been granted exclusive right to carry out certain activities such as public audits, and society is justified in expecting something in return.

Molyneaux added: "But accountants are different from some of these other guardians as they are also actively involved in commercial activities. How they conduct themselves is very, very important indeed. They can be involved in - and set an example in - every sort of activity that modern society participates in.

"Auditors operate as guardians but the whole way they are remunerated is on the commercial side - which means they sit uneasily at the cusp of the two areas of activity." Molyneaux said this sometimes means beancounters find themselves having to make "principled compromises".

Throughout an accountant's career there is a danger that professional standards and integrity play second fiddle to commercialism (for example, in order to grow their firm and win non-audit work from a particular client, they might turn a blind eye to anomalies in the accounts).

Molyneaux claims there is little knowledge or understanding outside the accountancy profession of the moral pressures that accountants face. He says this is because accountants are effectively barred from publicising instances where they stand up to unethical clients for reasons of client confidentiality.

One of the inspirations for the course is a quote from Howard Gardner, a Harvard University psychologist. Writing in the Harvard Business Review, Gardner said: "If you are not prepared to resign or be fired for what you believe in, then you are not a worker, let alone a professional. You are a slave."

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