FEBRUARY 1, 2017 RECENT DEVELOPMENT
This week, the IFAC Global Knowledge Gateway reported that two European professional organizations dedicated to accountants working with small and medium sized entities or "SMEs" conducted a survey to determine how often accountants are pressured to act unethically. The European Federation of Accountants and Auditors for SMEs (EFAA) and the Accountants Association in Poland received 662 responses to its online survey, which provided some interesting insights about the business environment in the SME community and the pressures placed on accountants in Europe and the European Union. Respondents worked in all areas of the profession, both within companies, and as auditors, tax practitioners and consultants. Key takeaways included:
- The pressure on accountants is widespread; 64% of respondents stated they've been pressured during their careers to do something that would cause them to violate the profession's ethics code and/or tax or accounting laws.
- 37% of the respondents experienced this type of pressure five (5) or more times in their careers (pretty astounding).
- Most of the actions accountants were pressured to take impacted a company's financial or tax reporting.
- Pressure most commonly was reported as coming from those outside the profession, e.g. the client's management or a board member.
- Explicit "rewards" or "threats" were typically not present, however, the accountant generally understood that the reward was continuation of the client relationship or employment, or termination.
- Most accountants did not report succumbing to the pressure, for a variety of reasons, although a significant minority (32%) did out of fear that they would lose the client or employment relationship if they did not.
Further insights are available in the report - highly recommended reading!