E3-Professions and the public interest

Professions and the Public Interest

Accountings role as a value-laden profession
Acting against the public interest

Professions and the public interest

Profession
Has two essential and defining characteristics:
1. A body of theory
2. Knowledge which guides its practice and commitment to the public interest
Professionalism
Professionalism may be interpreted more as a state of mind while the profession
provides the rules that members of that profession must follow.
Over time, the profession appears to be taking more of a proactive than a reactive
approach. This means seeking out the public interest and positively contributing
towards it
The Public Interest
Providing information that society as a whole should be aware of in many cases
public interest disclosure is used to establish that disclosure is needed although
there is no law to confirm this action
A professional accountant
Society accords professional status to those that both possess a high level of
technical knowledge in a given area of expertise (accounting, engineering, law,
dentistry, medicine) on the understanding that the expertise is used in the public
interest.
The body of knowledge is gained through passing examinations and gaining
practical expertise over time. Acting in the public interest means that the
professional always seeks to uphold the interests of society and the best interests
of clients (subject to legal and ethical compliance).

Fundamental principles (responsibilities) as a professional

Society has reasonable expectations of all professionals. The major professional

responsibilities of any professional are as follows:
1. Integrity
The highest levels of probity in all personal and professional dealings.
Professionals should be straightforward and honest in all relationships.
2. Objectivity
Professionals should not allow bias, conflicts of interest or undue influence
to cloud their judgements or professional decisions.
3. Professional competence and due care
Professionals have a duty to ensure that their skills and competences are
continually being updated and developed to enable them to serve clients and
the public interest.
4. Confidentiality
Professionals should, within normal legal constraints, respect the
confidentiality of any information gained as a result of professional activity
or entrusted to them by a client.
5. Professional behaviour
Professionals should comply fully with all relevant laws and regulations
whilst at the same time avoiding anything that might discredit the profession
or bring it into disrepute.

Responsibilities to employer

Acting with diligence, probity and care in all situations.

Absolute discretion of all sensitive matters both during and after the period
of employment.
To act in shareholders interests as far as possible and that he or she will
show loyalty within the bounds of legal and ethical good practice.

Responsibilities as a professional

To observe the letter and spirit of the law in detail and of professional
ethical codes where applicable
If no codes, apply principles-based ethical standards (such as integrity
and probity) such that they would be happy to account for their behaviour if
so required.
To act in the public interest

Accounting has a large potential impact on the public - the working of

capital markets and hence the value of tax revenues, pensions and
investment rests upon accountants behaviour.
The stability of business organisations and hence the security of jobs and
the supply of important products also depends on the professional
behaviour of accountants.

Accountings role as a value-laden profession

Accounting rules can influence how power and wealth is distributed in society.
For example, money should go first to those who invest (suppliers of financial
capital)
Although you might argue that accountants just follow the laws (though even these
are ethically suspect)
Accounting produces information for individuals or corporations seeking to
maximise their personal wealth.
The result of this, according to accounting values, is economic efficiency, maximum
profits and economic growth, and therefore society being better off.

Acting against the public interest

Critics have argued that the rules:
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Allowing choice of accounting treatments is open to manipulation that may

not be in the public interest
Auditors do not even have an explicit responsibility to detect and report
fraud
Emphasise client confidentiality over disclosure in the wider public interest,
and teaching accountants to follow rules rather than question them
Allow auditors to establish a long-term, cosy relationship with clients by the
failure to require compulsory rotation of auditors
Allow auditors to provide non-audit services, rather than forcing auditors to
maintain a distance
Allow too few a number of large firms who dominate the audit of major listed
companies and therefore can effectively set the agenda as regards scope of
audit work