The issue of accounting ethics with relation to national development has been one of a debatable concern. The reason is however, not far-fetched. Despite various ethical codes issued by different accounting professional bodies, it seems to be a paradox that the rate of corporate scandals have upsurge over time. It is no naysay that accountants are faced with lots of ethical dilemmas in the course of their professional careers. These impasses can come in diverse ways owing to the flexibilities of situations surrounding them. The truth however, is that these quandaries cannot be overcome by just simply obeying the ‘ethical codes’ as prescribed by the professional bodies. This is because ethical dilemmas pose a threat to strategic decision making in which, professional codes might be incapacitated to assess the potential course of actions of the accountant in such circumstances.

The nature of the accounting profession seems to be multifarious, as oppose to what a layman thinks it is. Users of financial statements such as shareholders, potential shareholders, creditors, and others depend largely on the professional verdicts of the accountant to make various decisions that concerns them. Nevertheless, these users have different areas of interests which in turn, put the accountant to test on his claim of objectivity and fairness as his core ethical values. Due to this scenario, recent events have again shore up the need for accounting practitioners to act in fair and square, principled manner in the portray of the financial performances of the organizations they work for.

A brief history on accounting ethics would put one on a pedestal of profound understanding on the subject. Accounting ethics has been primarily traceable to Luca Pacioli regarded as the ‘father of Accounting’ in his book, ‘Summa de arithmetica, geometria, proportioni et proportionalita’. During Pacioli’s age, the subject of ethics did not gain complexity as it is now due to the simplicity of transactions in those periods. However, as the nature of human transactions began to get intricate and convoluted, it was essential that body of rules should be established as a guide for practising accountants. With Pacioli’s summa as a foundation, ethical standards have since been developed primarily by professional organizations, government groups, and independent companies. This single reason birthed a new dispensation comprising of the establishments of various accounting professional organisations in the eighteenth century. From a broader perspective to begin with, the Institute of Chartered Accountants of England and Wales (1880), Institute of Chartered Accountants of Scotland (1854) and American Association of Public Accountants (1887) were instituted. Even though professional bodies in Nigeria took a longer time to get established, The Institute of Chartered Accountants of Nigeria (1965) and Association of National Accountants of Nigeria (1979) were also formed in order to improve ethical compliances among members who would increase the hope of sustainable national developments for a country like Nigeria.

Despite the advent of the new era of the professional bodies, corporate scandals were still on the rise because membership then, was voluntary and as such, debilitated the professional associations in ensuring that individuals conform to the suggested behaviours. After much restructuring on ethical guidelines by professional bodies, the concept of accounting ethics has now gained recognition as an essential tool for a viable, developmental progress of any country.
With a background laid on the history of accounting ethics, it becomes apropos to give the contentious subject an appropriate definition. The definition of ‘accounting ethics’ is an ambiguous word that has generated series of definitions by different scholars which of course, is predicated on their individual perspectives. However, an insight on this subject would be greatly improved if looked upon, from its Greek and Latin etymologies. The word ‘Ethics’ is derived from the Greek word ‘ethos’ (character) and Latin word ‘moras’ (custom). Thus, ethics can simply be defined as a system of moral principles governing the appropriateness of a conduct of a person or a group. Accounting has its origin from the French word ‘comptre’ and Latin word ‘computare’. According to the Encarta Dictionary, accounting, on the other hand, can be defined as the activity, practice or profession of maintaining the business records of a person or organisations and preparing forms and reports for tax or other financial purposes. Putting the two words together, Accounting ethics is a system of moral guidelines that governs the preparation, analysis and interpretation of financial records by an accountant for the purpose of making economic and informed decisions.

The causes of unethical scandals in the accounting profession could be traceable to a lot of factors. This subject becomes more keenly dispiriting in a country like Nigeria that has been labelled with a lot of bad names in the global world. High rate of corruption, embezzlement and misappropriation of funds in both the public and the private sectors have plummeted the national developments being clamoured for in the country. These shady exercises would obviously not be possible if the accountants and other key financial directors of such organisations were not used as tools for financial aberrations. Though, it is easy and nippy to blame these finance and accounting professionals for grave misconduct, but how do one easily judge which one to choose between satisfying the thirst of one’s employers or being pushed out of employment for non-compliance? And not only that, but also being pushed out of employment in a country where the unemployment rate soars at a very high level! This portrays the issue of threat to independence of the professionals which is perceived by experts as a key cause of unethical standards.

Also, the issue of greed, self-interests, improper leadership skills and ill-culture, and failure to maintain objectivity has played a major role in the issue of corporate scandals. Moreover, inappropriate professional judgement which is predicated on wrong value systems is another issue worthy of concern. This is seen in a joke commonly made by critics of the accounting profession. ‘How much is two plus two?’ asked a client. ‘How much do you want it to become?’ replied his accountant. In other words, accounting has been pictured as a tool for ethical improprieties. Ukranian Expert, Andriy Kuksenko has long said that wrong value systems are the causes of the deplorable state of the national development in Nigeria.

Despite the prodigious challenges of accounting ethics on national development, there are still solutions that can be proffered to curb the excesses of these corporate scandals in order to ensure a sustainable development in the country. The first is the introduction of ‘ethical audit’ into the corporate system. Auditing is one of the largest growing professions in the country. This concept should not only be introduced, but also implemented as a statutory obligation to organizations that trade with public funds. At the end of a financial period, such audit would dig out the extent of ethical compliance in an organization, various unethical behaviors and appropriate penalties to be issued out to erring members. The American Institute of Certified Public Accountants has served as the institution responsible for ethical compliance in the United States and has since recorded remarkable success in its operations, which is also possible in Nigeria.

Another step forward on this issue is the inculcation of the right value systems of accounting ethics on young professionals. This can only be done through ethical education. Professional bodies should include ethics as part of their syllabus to help explore life case studies of ethical dilemmas, sightsee issues from professional practice and also delve into the complexities of ethics which would broaden the horizons of the professionals. Even though professional institutions like The Institute of Chartered Accountants of Nigeria, Chartered Institute of Stockbrokers and others have integrated this in their syllabi, there is still much to learn from. Apart from writing professional exams, these resolute bodies could also include ‘working experiences’ from the corporate world, in form of ‘internship’ for a defined period as part of the requirements to gaining professional qualifications. This would put members on their toes as they are already expose to real-life scenarios that would deepen their understanding on ethics and not just dependent on what is taught in the four walls of the classrooms.

Conclusively, I recommend an ethical compliance institution be established in our country. This institution would serve as the parent body of all professional organizations. Just like the International Federation of Accountants (IFAC) and the American Institute of Certified Public Accountants (AICPA), this institute would be responsible for resolving ethical dilemmas, dealing with pressures to act unethically, balancing confidentiality with blowing the whistle on illegal actions, training of professionals on ethics and compliance at the national level. With these suggested solutions, if considered and copiously explored, would skyrocket the rate of national development in Nigeria.


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