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The only way is ethics

CIPFA’s Statements of Professional Practice will help public sector accountants get it right

November 2017

Few decisions we face will be as simple as yes or no. There is always a context and always factors to weigh up. Underpinning our choices are ethical considerations; put simply, am I doing the right thing, as an individual and as a member of society. This is no less real in professional life as it is in our personal life.
Today, many local government finance teams must manage not only the challenges that go with having to provide services with reduced funding, but also the opportunities of moving towards greater self-sufficiency and local leadership.
Against this backdrop, some councils are embarking on increasingly entrepreneurial initiatives in order to manage financial constraints. While this can offer a valuable revenue solution, such ventures do increase the level of risk and therefore adds pressure on those teams and individuals who must make the decision.
A faster, more commercial environment can result in more freedom and delegation of authorisation and situations can arise where if decisions are not taken, then opportunities can be lost. Who would want that on their watch, especially when fixed-term or invest-to-save job contracts are at stake?
Under these conditions, finance officers can be under increasing pressure to act now and validate later for one time only deals and have to exercise and draw on their professional experience and judgement to determine whether to take decisions or to delay them and potentially lose out to undertake the necessary due diligence.
But what happens if they make the wrong judgement and take the wrong decision, in good faith and in what they thought was for the benefit of taxpayer? Are they supported? And who is accountable.
CIPFA’s ethics working group are working on updating and revising the Statements of Professional Practice (SOPP) in line with the International Ethics Standards Board for Accountants (IESBA) Code of Ethics, which it fully adopts. The group’s remit is to raise awareness and expectations of what members can and should do when faced with ethical dilemmas.
No matter how much of a good deal something looks or how busy we are with other things, we have a duty to ensure the appropriate due diligence and governance processes are in place. We are bound by the SOPP and to have it fall by the wayside has dire consequences. Sure the risk of being scapegoated or having your post deleted is extremely worrying but not to uphold ethical standards for fear of these is worse and carries with it a niggling conscience.
Ethics is an important consideration at every level of public finance and plays an integral part of CIPFA’s Professional Accountancy Qualification. Students must understand not only how certain decisions are made, but also why they are made, in the hope of producing CIPFA members around the world who are robust and duty bound to deliver on the principles set out in the SOPP, such as integrity, objectivity and professional competence.
• Thanks to CIPFA for this article

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