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ICAEWwww.mia.org.my Malaysian Institute of
Accountants
Banquet Hall9.00am
ConcurrentSession 1A
Ethical Practice -Black, White or Grey?
Mr. Mark BillingtonRegional Director, South East Asia, Institute of Chartered Accountants in England & Wales (ICAEW)
Ethical practice: black, white or grey?
Mark Billington14 October 2009
ICAEW
About the ICAEW
• Founded in 1880
• 130,000+ members in 160 countries
• Work in public practice, public sector and industry
• Royal Charter – the public interest and the title Chartered
Accountant
• ICAEW acts as regulator, regulatee and professional
member body
ICAEW
South East Asia
• Long time collaboration with Malaysia City Group
• 30 Authorised Training Employers in Malaysia
• Malaysia (2004), Singapore (2008), South East Asia Office (2009)
ICAEW
Ethics ….• Is not corporate governance,
corporate responsibility or sustainability
• Is values and principles acceptable to society
• Is concerned with human character and behaviour
• Goes beyond obeying laws, rules and regulations
ICAEW
Why is ethics important?
• Markets
• Information
• Trust
• Mechanisms
T MMO
ICAEW
Ethics in the wider business sphere
Need?
• Enron
• Maxwell
• Banks
Professional influence
• No overall control
• Accountants in roles
• Persuasion
National Integrity Plan
ICAEW
CorporateResponsibility
Researchwith PekingUniversity
Finance &Management
FinancialServices
Financedirection
Inspiring confidence in
financialservices
CorporateFinance
Financingchange
RiskManagement
Thought leadership
Corporate Finance
CorporateGovernance
InformationTechnology
re:Assurance
Audit quality forum
Tax
Market Foundations
Dialogue incorporate
governance
Sustainable Business
Towards a better tax
system
Makinginformation
systemswork
Informationfor bettermarkets
ICAEW
Market foundations
Professions
Legal entities
Public interest Regulation
Ethicalbehaviour
Economiccrime
ICAEW
Ethical behaviour
• Integrity focus:
- Reporting with integrity
- Instilling integrity in
organisations
ICAEW
Is there always a ‘right’ answer?
• Example: truth or
feelings?
• Example: maintain
confidence or
endorse error?
ICAEW
Achievements
Qualities
Commitments
Motives
Moral valuesLeadership
Strategy
Policies
Information
Culture
Drivers of organisational integrity
Be honest and truthful
Be fair
Comply with laws
Promote communityinterests
Be open andadaptable
Take correctiveaction
Show consistency
ICAEW
Objectivity
Considerthreats
Applysafeguards…
IFAC Code of Ethics
Shortdescription
of coreapproach
Integrity
Plus someillustrative examples
…or don’tdo it
Confidentiality
Professionalbehaviour
ProfessionalCompetence& due care
A few prohibitions
ICAEW
Framework for Ethical Decision-Making
Do I have all the facts relevant to this situation?
Who should be involved in the discussions?
What are the ethical issues involved?
What are the alternative courses of action and their
associated consequences?
ICAEW
Example of rules based approach
The rule of unintended consequences!
ICAEW
Why principles over rules?
Avoids ‘its ok unless
prohibited’ argument
Recognisesreality: manage
conflicts
Not easy option for users or
regulators, but…
Can apply toInfinite
circumstances
Shorter andeasier to learn
Avoids legalistic‘form oversubstance’compliance
ICAEW
Infrastructure – what we do
License, or PC
Monitoring
Education, inc. CPD
Discipline
Support
Transparency
ICAEW
Auditor independence
• Public focus
• Regulatory involvement
• Lots of rules
• Harmonise around IFAC?
ICAEW
Conclusion: ethical practice is….
• Often seen to be
• But it is and should be
Black and white
Grey
