Ethical Due Diligence in Hiring and Assessing Professional Accountants

This report provides a starting point for any organisation seeking to establish an ethical culture, where the aim is to have shared understanding of the types of behaviours that are expected and acceptable, and having the right fit of people engaged in the organisation.

22 February 2017
A starting point for any organization seeking to establish an ethical culture, where the aim is to have shared understanding of the types of behaviours that are expected and acceptable, is having the right fit of people engaged in the organization.
This becomes even more critical in senior and influencing roles – the “tone from the top” – which helps to both set examples and anchor ethical behaviours framed by the organization’s policies, Code of Conduct or Ethics and stated values and purpose.
The focus on corporate culture is intensifying with recent work done by the UK’s Financial Reporting
Council as outlined in a 2016 briefing aimed at the Board. There is greater recognition that a values based culture is key to sustainable growth. Both how and who you hire create the foundations for the culture you seek by employees’ behaviours reflecting an organization’s stated values and corporate responsibilities.
Conducting ethical due diligence during the recruitment process can help ensure individuals who are selected are more likely to reinforce and maintain the organization’s values and set an example to others throughout the organization. Such individuals are less likely to conduct business or make decisions in a way that might undermine the organization’s ethical standards or reputation. Additionally, by emphasising an ethical approach, an interviewee is made aware that ethical values are taken seriously in the organization and ultimately should contribute to the reduction of integrity risk.
For those in professional accounting roles, at all levels of the organization, both upholding their professional Code of Ethics and influencing others to do the right thing is conducive to embedding ethical practice. Recent CGMA research showed that designation holders felt valued by their employers because of their ethical standing and at the same time, their professional status can be seen as a differentiator.
Both individuals and organizations should identify the competencies that are particularly important to drive their business and which provide the optimum fit with their corporate culture.
Finance professionals need to bring challenge and objectivity to the management teams they support, and they in turn, need to be supported by the leadership. The “tone from the top” and how it is played out across leaders in different functions becomes an imperative in attracting and retaining those who reflect stated values.
In appointing senior financial staff, particular attention should be paid to stated behaviours such as acting with integrity, accountability, honesty, team work etc. The International Federation of Accountants highlight this, recognising that CFOs should bring professional qualities to their role and encourage ethical behaviour and decision making throughout an organization to ensure sustainable value creation.
Additionally, exercising ethical due diligence in the recruitment process could be considered an example of one of the “adequate procedures” for reducing the risk of bribery as required by the 2010 UK Bribery Act. It shows the employer is acting responsibly.
Given the variety of roles accounting professionals serve within the business and their function in assessing and mitigating risk, ensuring that due diligence is carried out when appointing new staff and reallocating responsibilities gives a clear message to not only the candidate, but also the wider team expectations around ethical behaviour.