Having ethical guidelines for your accounting firm helps to protect your reputation and the industry’s reputation as a whole. Not only do they help keep your firm a trustworthy and reliable option for clients, but depending on how your firm is licensed, ethical guidelines are also compulsory.
But ethics can be such a nebulous topic, how do you know you’re including the key points in a way that’s clear to your employees? In this guide, we’ll explore the aims of ethical guidelines, what needs to be included, and how you can create clear and concise recommendations to protect your employees and clients.
What Are Ethical Guidelines?
Ethical guidelines are usually a broad set of requirements that your employees should work within. They outline the ethical principles your practice maintains that will affect everyday decisions and behavior among employees and clients. This helps to define what kind of conduct is encouraged within your firm. As well as guidance for how to operate around clients, ethical guidelines are also useful for combating harassment and other issues employees may come up against.
While ethical guidelines provide specific processes for dealing with issues like the above, they usually will not be quite so specific when it comes to other ethical matters. If you’d like to provide your employees with set rules for how to behave in specific situations, it can be useful to draw up a code of conduct alongside your ethical guidelines.
Why Does Your Firm Need Clear Ethical Guidelines?
Now you know the purpose of ethical guidelines, let’s take a look at some of the ways they can help in the day-to-day running of your firm.
- Guidance - It seems obvious, but having guidelines to refer back to can mitigate a lot of stress and avoid issues getting out of control. Ethics can be a complex matter, so laying out your firm’s ethical guidelines helps eliminate uncertainties, and gives your employees and clients a constant point of contact. For this same reason, your ethical guidelines should be as clear and concise as possible.
- Employee Satisfaction - Ethical guidelines help to set out acceptable behavior between employees. Any employee can refer to the guidelines if they feel they have been treated unfairly, and find out where to go next. Being able to combat issues among those working in your firm will lead to smoother working relationships and an increased sense of teamwork.
- Client Reputation - Adhering to ethical guidelines at all times is vital to maintaining client trust, and ensuring your reputation is one of reliability. Guidelines set expectations so clients know exactly what kind of treatment they’ll get from your firm, and where you’ll stand on their requests. Clear ethical guidelines make it much easier for clients to form a positive opinion of your firm.
- Regulatory Adherence - In many ways, accountants are the front line for combating fraud and other financial crimes. Having an ethical code that sets out standards for professional behavior, what to do in tricky situations, and how to report suspicious activity, will help protect your firm from falling victim to fraud and coming under legal scrutiny.
The clearer your ethical guidelines are, the easier it will be for your firm to follow them and maintain the advantages listed here.
What Should Be Included in Ethical Guidelines for Accounting Firms?
Many organizations and committees for accountants already have ethical guidelines, but it’s always worth drawing up those specific to your firm. In general, most ethical guidelines for accountants will include some or all of the following sections: `
Objectivity
This heading lays out guidelines and expectations for impartiality in your firm. Accountants should always behave without bias, personal or otherwise, and be as accurate as possible when completing tasks. This heading can also pertain to the inclusivity and anti-discrimination practices your firm abides by.
Integrity
This heading will explain how employees should behave in professional relationships. Accountants need to be honest and forthright with information concerning their clients or any issues. Here you can also lay out helpful resources and points of contact for any employees dealing with workplace issues, and definite ‘don’ts’ as regards insubordination and harassment in the workplace.
Competence
The accounting landscape is constantly changing. Accountants working in your firm should exhibit a level of competence that corresponds with the tasks they’re being given. This heading can explain the standard of competence required, and how often you expect employees to participate in training and work to hone their skills. This will ensure you afford clients the highest standard of service.
Due Care
It won’t be very helpful if your employee makes a mistake because they never read the code of conduct or other policies at your firm. All employees should familiarize themselves with operating procedures and accounting regulations, especially when they’re revised, as a matter of due care.
Professional Behavior
This relates to your employee’s relationship with the accounting industry as a whole. Employees should avoid any action that discredits their firm or the practice of accounting in general, and report any suspicious activities through the correct channels.
Scope of Service
This heading will help your employees understand when they should no longer provide their expertise because a client’s request is outside the scope of service. This may be because there is a conflict of interest or a lack of internal regulatory policies within the client’s business.
You can also include guidelines for how you expect employees to behave outside of work time, so as not to create conflicts of interest and to adequately represent your firm. You might also like to outline expectations for punctuality, use of personal electronic devices during work time, dress codes, internet use on employee devices, and absences from work.
How to Make Sure Your Ethical Guidelines Are Clear and Concise…
Some organizations have ethical guidelines that are thousands of words long. However, the above headings included in your ethical guidelines won’t need more than a few sentences to explain them. Remember, you only need to tell your employees what kind of behavior you expect them to exhibit, not provide them with specific instructions for how to behave. Here are some tips for making sure your guidelines are as clear and concise as possible.
Do
- Consider Your Employees’ Ethical Knowledge - As mentioned above, ethics can be a big concept, with a lot of knowledge needed to understand expectations and put them into practice. While your guidelines shouldn’t explain the potential ethical issues behind expectations, it’s always worth considering the extent of your employees’ knowledge of ethics, so you know if they’ll need further assistance or training.
- Welcome Questions - You may like to appoint an ethical advisor, or an ethics professional that your employees can seek out if they need to shed further clarity on a specific situation. However, be careful when navigating discussions surrounding your ethical guidelines. Employee suggestions to improve ethical guidelines should be taken seriously, but not adhering to your firm’s ethical guidelines is simply not an option.
- Make Your Guidelines Easily Accessible - You can make the guidelines’ language as simple as possible, but that clarity won’t come across if your employees don’t know where to find them. Easy access will ensure employees can become familiar with your guidelines, and also refer clients to them should they ever need to. It may even be worth publishing your guidelines on your site or elsewhere, should the state boards of accountancy need to find them.
Don’t
- Use Over-Complex Language - While you shouldn’t opt for a conversational tone in your guidelines, simple language is always best to achieve clarity. Avoid using technical or legal jargon in your ethical guidelines unless they specifically affect employee behavior or guide them to someone that can assist them. You should also avoid using idioms or colloquialisms, or anything that can be easily misconstrued or misunderstood.
- Include Unnecessary Information - Ethics can cover a wide variety of issues relating to accounting, but there are many things you don’t need to include in your guidelines. As well as avoiding explaining the ethical issues that led to the guidelines, you don’t need to include the importance of following ethical guidelines, or in-depth explanations of disciplinary procedures for non-adherence if you don’t feel it appropriate.
- Prioritize Conciseness over Clarity - While it’s true that discussing ethics for 20 pages can vastly over-complicate things, sometimes you need to further explain certain aspects of your expectations. Often, you won’t need to sacrifice one for the other, but it’s far more important that your expectations be clear to employees than remain under a certain word count.
Conclusion
Ethics in accounting usually warrant some discussion, however when it comes to guidelines, they need to be as simple as possible. Clear and concise guidelines will protect your firm, your employees, your clients, and the accounting profession.
Guidelines cover your firm’s requirements for behavior, but in the interest of conciseness, won’t dive into specific situations and definite actions your employees can make. Instead, they are broad and general, clearly depicting how you expect your accountants to behave. This is unless you want to use your ethical guidelines to lead employees with issues to the correct departments or individuals who can help them.
Unnecessary information and over-complex language are no-nos but don’t block your employees from asking questions or seeking further clarity on nebulous ethical concepts. Ethical guidelines can always be followed up with extra training or assistance from experts. So, does your accounting firm have clear and concise ethical guidelines that follow the tips above? If not, now you know exactly how you can improve them.
Sources
https://www.surgentcpe.com/blog/5-ethical-requirements-accountants-should-keep-in-mind
https://getonline.uwf.edu/business-programs/mba/accounting/ethics
https://www.icaew.com/for-current-aca-students/applying-for-membership/code-of-ethics
https://www.betterteam.com/code-of-ethics
https://www.imanet.org/-/media/b6fbeeb74d964e6c9fe654c48456e61f.ashx
https://www.ethicsboard.org/projects/revised-code-ethics-completed
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