DOES COMPLYING WITH RULES MEAN BEING ETHICAL?

Rules are a very important element of ethics. Usually this means focusing upon the rules contained in the accounting profession’s code of professional conduct and references to legislation and corporate codes of conduct. They are an efficient means by which the accounting profession can communicate its expectations as to what behaviour is expected.

However, a view that equates ethical behaviour with compliance to professional rules could create a narrow perception of what ethical behaviour constitutes. Compliance with rules is not necessarily the same as ethical behaviour. Ethics and rules can be different. Ethical principles and values are used to judge the appropriateness of any rule.

Accountants should have the ability to conclude that a particular rule is inappropriate, unfair, or possibly unethical in any given circumstance. Accountants who view complying with ethics as simply complying with rules are likely to suffer a moral crisis when encountering problems for which there is no readily apparent rule. Ethical behaviour is based on universal principles and reasoned public debate and is difficult to capture in ‘rules’.

Accountants have to make accounting policy choices on a regular basis. Stakeholders rely on the information reported by accountants to make informed decisions about the entity at hand. All decisions require judgment, and judgment depends on personal values that incorporate ethical values that dictate whether any accounting value chosen is a good or poor for economic value.

To maintain the faith of the public, accountants must be highly ethical in their work. However, the focus on independence and compliance with requirements may override ethics in practice and as a result, certain key aspects of ethical behaviour may be eroded.