Discreditable behaviour: 7 areas where it can ariseActions that discredit the accounting profession can go beyond proficiency failures and include conduct relating to a member’s personal life.
Trust is of immeasurable value. It is difficult to gain and very easy to lose. For management accountants and the accountancy profession, it must be maintained. It would be impossible for management accountants to help businesses meet their financial and strategic aims if trust in them is eroded.
CIMA members are required to avoid any conduct that they know or should know might discredit the profession. This means that a professional accountant must not knowingly engage in any conduct that does or could damage the reputation and integrity of the profession.
Here is a closer look at some areas where discreditable behaviour can arise and why it is important to maintain high professional standards at all times.
Preparation of financial statements or records
The CIMA Code of Ethics, Part 2, Section 270.3 states that a member must abide by the principle of professional behaviour, which requires a member to "comply with relevant laws and regulations and avoid any conduct that the member knows or should know might discredit the profession". This conduct includes negligently making, or permitting or directing another to make, "materially false and misleading entries in the financial statements or records of an entity" (Section 270.9 A1).
Fraud can have devastating financial consequences and also cause a loss of confidence in the very institutions that are at the core of any functioning society. Participating in fraudulent activity devalues the profession and the good work of all those within it. That is why counteracting fraudulent activity is at the forefront of CIMA members' minds and is highlighted by the Code of Ethics, which sets out various considerations for members to weigh when determining how to counteract fraudulent behaviour.
Sections 270, 280, and 290 of the Code of Ethics provide greater detail on discreditable conduct, responding to pressure to breach rules, and responding to noncompliance with laws and regulations.
The ability to maintain confidentiality appropriately is a core component of the trust required for management accountants to discharge their duties successfully. A failure to do so can have damaging repercussions for individuals, businesses, and the profession as a whole.
The CIMA Code of Ethics, Part 2, Section 270.4 requires that CIMA members respect the confidentiality of information deriving from professional and business relationships. This obligation extends further than knowingly disclosing confidential information. Members are required to stay alert to the possibility of inadvertent disclosure. So special care should be taken when speaking with close business associates or family and friends. Remember, what might start as a seemingly harmless chat in the pub may end up being the start of long and stressful disciplinary proceedings.
That said, the balance between maintaining confidentiality and having a duty to disclose information can create tension in this area. That is why it is important to remember that, in certain instances, the duty to report trumps confidentiality. Subsection 114.1 A1 of the Code of Ethics reminds us this will be the case where disclosure is required by law, for example, when providing evidence during legal proceedings or disclosing infringements of the law to relevant authorities.
Discriminatory employment practices
Behaviour that could discredit the profession goes beyond strict questions of accounting proficiency. CIMA upholds the aims and principles of equal opportunity and fundamental human rights worldwide. This includes the rights relating to nondiscrimination. Discriminatory employment practices can mean that those who have the skills to excel are denied fair opportunity to do so and can cause irreparable harm to a person both personally and professionally.
Discriminatory practices are various and can include unfair dismissal, unequal pay, and some illegal practices related to recruitment.
A member would be found to have committed an act discreditable to the profession if a court or administrative agency of competent jurisdiction, such as an Employment Tribunal, finds that a member has violated anti-discrimination laws of the relevant jurisdiction.
CIMA members are strongly encouraged to consider appropriate next steps if they become aware of discriminatory employment practices. The Ethics decision tool can help clarify the issue and decide next steps. If in doubt, seek guidance and act in appropriate stages — report to your line manager and, if necessary, to HR to find an internal resolution before reporting more widely. The Ethics Helpline may also be able to help clarify the issue and provide further guidance — including links to appropriate sections of the Code of Ethics and, for members in the UK, a referral to Law Express.
Actions in one's personal life
CIMA members are expected to uphold the standards of the profession at all times. It is, however, possible for a member's conduct in their personal life to bring the profession into disrepute. This includes being subject to criminal convictions or sanctions from other bodies. For example, CIMA Disciplinary Committees have taken action where CIMA members have received convictions for nonfinancial criminal activity.
Such activity might lead people to question the propriety of CIMA members and the wider profession itself. Whether a specific set of circumstances would lead to disciplinary action is determined on a case-by-case basis. CIMA members must inform the Institute if they are convicted or disqualified from acting as an officer of a company, or if they are subject to any sanction resulting from disciplinary action taken by another body or authority.
Inappropriate use of social media
You may be posting online in a personal capacity, but the Code of Ethics still applies. A fundamental principle of the CIMA Code of Ethics is "Professional behaviour", and this requires that members avoid "any conduct that the accountant knows or should know might discredit the profession".
Online discourse can often be strongly opinionated and increasingly divisive. While you may deem your online conversations to be perfectly legitimate, others may not. Be sure to take great care when posting online, particularly on subjects of a sensitive nature. Further advice can be found in the FM article, "Inappropriate Use of Social Media: 4 Things You Should Know", and in CIMA's social media guidance on the CIMAglobal website.
One of the many reasons why the expertise of CIMA members is so highly valued is the knowledge and skill required to be a chartered management accountant, which are developed over years of meticulous study and practical experience. This is why breaching CIMA's exams rules damages the very foundation of the profession. If a professional's qualification cannot be trusted, how can they themselves be?
The Code of Ethics, Part 2, Section 270.7 A1, states that a member who "solicits or knowingly discloses … the CIMA Examination question(s) or answer(s), or both, without… CIMA's … written authorisation shall be considered to have committed an act discreditable to the profession".
Sanctions for breaching or attempting to breach CIMA's exam rules range in severity and could lead to the cancellation of a student's registration with CIMA. Further details can be found on the Exam ethics and policies hub of the CIMAglobal website.
— Xose Lumor is the manager, Advocacy & Professional Ethics–Management Accounting at the Association of International Certified Professional Accountants, representing AICPA & CIMA, and is based in the UK. To comment on this article or to suggest an idea for another article, contact Oliver Rowe at Oliver.Rowe@aicpa-cima.com.