In a world where businesses must be more transparent than ever, ethical conduct is the foundation for what accountants do. As the business community depends on accountants to provide exact audits and statements with the highest degree of accuracy and ethical standards, the boundaries between right and wrong can become blurred. The AAT, the UK’s leading professional membership bodies for accounting staff, offers advice on how to keep on the straight and narrow.

Economic downturns are renowned for increasing levels of fraud and the recent recession has been no exception. Kroll, the international risk consultancy group, states in its annual Global Fraud Report 2009/2010 that companies lost on average $8.8 million to fraud over the past three years. First and foremost, when financial material is involved, there can be no conflict of interest. Holding stock in a company you are auditing is completely unacceptable. However, boundaries of other issues often wander into a grey area because they can rely solely on an accountant’s personal judgement. The public expects the highest moral standards from professionals like accountants and any misconduct will damage the profession.

Tania Hayes, AAT’s conduct and compliance manager, comments: "Proper ethical conduct is reflected by an attitude of mind and the intentions of those involved as well as the perception of those intentions by others. The first step in ensuring high standards of ethical conduct is to understand where potential conflicts might occur. That way the capacity to recognise when a dilemma might exist is enhanced, making it possible to follow this by determining an objective course of action which totally avoids them".

As an accountancy membership body, the AAT’s members are regulated according to a professional framework and ethical code. Advice for newly qualified accountants who have had little or no experience of ethical dilemmas, is invaluable as they climb up the career ladder. The AAT advises on such issues as conflicts of interest, fees, integrity, objectivity, confidentiality, professional behaviour, gifts and hospitality. In a nutshell, members are urged to:

•    Completely avoid even the appearance of conflict of interest – the most important rule of conduct within the accounting field
•    Be objective and act in the public interest because your responsibility is not exclusively to satisfy the needs of an individual client or employer
•    Keep sensitive information confidential. Accountants usually deal with some of the most sensitive material a client has. Therefore, that material should not be discussed with anyone outside the firm
•    Be straightforward and honest in professional and business relationships
•    Maintain professional knowledge, behaviour and skills at the level required by a client or employer

Tania concludes: "The decisions you make in the everyday course of your professional life can have real ethical implications and the AAT’s guidelines are designed to help."