29 (124) 2017
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HR & Professional Qualifications

The value of professional qualifications in accounting and auditing

by Marzena Richter ACA, management board member, Staniszewski & Richter
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More than 20 years’ experience as an employer combined with the role of advisor and auditor to international clients has taught me that moral value is intrinsically related to financial value.

Being educated in mathematics and physics means that my search for truth which must be proved by means of logic.

So how do we get from financial value being a function of moral value?

The answer is ethics – or simply the practical application of moral value in professional behaviour. I would define moral value as the sum of a set of principles, or in the case of chartered accountants – a code of ethics. The key pillars in professional ethics are integrity, independence, confidentiality and competence. These are crucial for good judgment and decision-making in accounting and auditing.

Judgment after all is exercised by the auditor who is charged with delivering an objective opinion on financial statements to those with a vested interest in the performance of the entity. The above key ethical principles can be further broken down into those qualities sought after in both auditing and accounting personnel.

So what qualities should a good auditor possess – and how are these practically related to professional ethics?

Qualities of integrity

A good auditor must always seek to convey the truth constructively however difficult and unpopular this may be. This will demand courage, sensitivity to relationships and diplomatic language. The auditor’s fiduciary duty can only be reaffirmed in this way. Trust is built through ensuring the auditor’s duties are fulfilled to the highest standard.

Qualities of independence

A firm belief in the freedom to speak the truth combined with lack of concern over the opinions of  the client’s staff should reinforce the independence of the auditor from the audited entity. Only in this way can the auditor become a figure of authority. Independence is a mindset, not a statistical calculation; it is governed by prudence, judgment, courage and control.

Qualities of confidentiality

The auditor must above all be loyal to the client who is the investor above all other parties. The auditor must therefore develop skills which govern the appropriateness of communication to various groups involved in the audit process.

Qualities of Competence

The interpretation and understanding of financial statements – and the ensuing financial data – is an art and great skill which develops with experience. In the world of international business, relevant communication skills (including foreign languages), knowledge of different legal systems, reporting conventions and tax regimes are essential competence areas. Concepts embedded in language and differences between systems, markets, economies and jurisdictions enrich competence. The overview of an entity within its group structure, economic environment, market sector and legal jurisdiction in depth and breadth strengthens the auditor’s assessment and competence.

So what qualities are sought of an accountant such as a  finance director or chief accountant?

Qualities of integrity

Accuracy, correctness, control and the ability to meet deadlines are all key qualities accountants must possess.  In addition, accountants’ honesty should endeavour to use their knowledge to the maximum advantage of their employer’s entity. For example, in the application of tax regulations or the management of the treasury function.  Accountants should provide management with an insight into seemingly complex regulations reaffirming decisions taken.  Leaving management in the dark is simply unethical.  Communication, oral and written should be concise and unencumbered by bureaucracy.

Qualities of objectivity

Employees should not let personal relationships interfere with the assessment of their colleagues’ work and must therefore exercise objectivity. Accounting functions are often team based. Similarly the application of reporting conventions, tax regulations, standards should be done with the greatest of diligence in order to ensure compliance with the laws and relevant standards.

Qualities of confidentiality

Employees involved in the accounting function must above all be loyal and discrete bearing in mind they have been trusted with highly sensitive and confidential financial information

Qualities of competence

The level of transparency of reporting, openness to change (such as increased automation, digitalisation, regulations), knowledge of changes in laws are all indicators of competence. The higher the degree of integration of systems, the more an enterprise controls its data. Conversely the less integrated a system means increasing the scope for duplication of tasks and manual controls. This in turn increases the risk of fraud and error which could result in the abuse of resources.  

The stronger the desire for improvement in competence means that the relevant personnel have a thirst for self-development, are engaged in their work and have a passion for what they do! This should make the working environment exciting and purposeful.

In summary, the financial value of your enterprise is significantly associated with the ethical values of management and employees in their professional life. Investing in professional qualifications increases technical expertise; more importantly it should provide any institution with a strong moral backbone within its finance function.

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