No matter your business or industry, ethical practices always need to be upheld in the workplace. With the numerous ethical and fraudulent business scandals in South Africa that have been brought into the spotlight, there is an added emphasis on the importance of ethics in accounting and financial management services for South African businesses. We highlight and answer the top questions regarding what accounting ethics are, why they are important, and how to tell if your business accountant is ethical so that you can select the best accountant for your business. SureBooks offers ethical accounting services that will grow your bottom line the right way.
What Are Accounting Ethics?
Accounting ethics are a set of principles that are determined by a Code of Conduct as decided by each countries governing body. Across every country, there may be a slight differentiation between the outlined accounting ethics, but the general principles always remain the same. We have outlined the standard accounting ethical principles that every accounting and financial management service provider must uphold in South Africa.
Accounting services are incorporated into the foundation of every business. If an accountant performs financial work without honesty as a guiding principle, this can then impact the decisions made by the business owner and can negatively affect the business. All accountants are, therefore, obligated to uphold honesty when performing an accounting service. Integrity in an accounting service ensures that the work performed by the accountant is reliable and aligned with the ethic codes and can therefore be trusted by the business owner and shareholders.
Objectivity in accounting services is critical. While your accountant should always perform work that is beneficial to your business and works towards growing your bottom line, your accountant should never allow bias, prejudice, or unethical judgements to affect their work. Personal relationships or personal gain should not impact the professionalism of the accounting work. When an accountant performs work independently, they are in line with this ethical code.
3) Public Interest:
Accountants hold an important position in a business and how they perform their work can have severe impacts on the public. Jobs and investments in a business can become affected if the accountant does not hold the accounting ethic of public interest at the centre of their work. By working objectively, honestly, and by upholding the public interest, both the business and the public can trust the quality of the work performed by the accountant.
4) Nature of Services:
Nature of services is an accounting ethic that refers to an accountant performing work that is within the scope of the accountant’s skills. Accountants uphold professionalism and integrity by only performing services that are within the scope of their qualifications, experience, and practicing license. This ensures that they are skilled to adequately perform their accounting work.
The nature of services ethical code also directs an accountant to not perform accounting work for a company that is behaving unethically. A business that has internal regulations that are unethical or behaviours that generate a conflict of interest between the business and public interest would be deemed an unethical business. To uphold professionalism in the accounting industry, accountants are required to withhold accounting services from unethical businesses.
5) Due Care:
An ethical accountant will strive to continuously keep up-to-date with the latest advancements in accounting skills, software, and accounting ethics. By taking due care to ensure that they are at the highest level of professionalism, their skills are continuously at the highest quality. The accounting ethic of due care enables accountants to provide high-quality service and always satisfy your business’s accounting or financial management needs.
Why Are Ethics Important in Accounting Services?
South African accountants have been placed under the spotlight due to a few individual accountants’ involvements in serious ethical scandals, with Steinhoff and KPMG being a few of the most widely known incidents. These scandals have highlighted an important issue in certain individuals offering accounting services: the lack of commitment to ethical practices. We have highlighted the key reasons why ethics is important in the accounting services you use for your business so that you can rest assured.
1) Business Reputation:
Businesses are governed by South African regulatory bodies to uphold certain compliances, such as annually paying business registration fees and remaining tax compliant. Any unethical actions performed by a business will leave the business at blame and not the accountant, which will leave you as the business owner with severe consequences. The last thing any business needs is their business name splashed across news pages for unethical accounting practices.
Unethical business practices will immediately damage the business’s reputation. Not only will this impact your business reputation, but it can also lead to bankruptcy and a loss of the business you created. An ethical accountant is critical for your business as they will uphold the integrity, trustworthiness, and ultimately the reputation of your business.
Your accountant will have access to intimate information about your business, as well as personal information about you and your employees. This information can range from financial information such as accountant details and tax statements to personal information such as names and addresses. As outlined in the new South African POPI Act (Protection of Personal Information Act), all personal information is required to remain confidential by all those in the business with access to it, including accountants.
An unethical accountant can use this financial and personal business information maliciously to create damage to your business or against you personally. An ethical accountant is important for your business as they will keep all your information confidential. When your accountant keeps your information confidential, they are demonstrating loyalty to your business and you can then trust their accounting service.
3) Tax Compliance:
Tax compliance is essential for businesses. If your accountant is intentionally manipulating financial information about your business or filling in your tax returns incorrectly, your business will face serious legal repercussions. An ethical accountant will remain objective and not alter your tax returns in the business’s favour and uphold integrity when filing your tax returns. This is critical to help your business avoid any legal problems.
The accounting industry is continuously evolving with the improvement of accounting technology. As previously outlined in the ethics of due care, an accountant must remain up-to-date with any alterations to accounting practices and ethical principles. Any changes in accounting guides or laws can severely impact your business if your accountant is not performing due care. Additionally, if an accountant is not up-to-date and an aspect of the accounting requirements falls outside of their scope, they are required to be honest about their skill set. An honest and up-to-date accountant is essential for the effective financial management of your business.
5) Financial Planning:
Your business accountant will be your sounding board and source of advice for decisions regarding the finances and future of your business. If your business accountant is performing an accounting service without integrity or objectivity, then your financial planning for your business will be based on skewed or inaccurate information. An ethical accountant is therefore critical for effective financial planning.
How Do I Know If My Accounting Services Are Unethical?
We have highlighted a few instances of unethical accounting services that will demonstrate that your current accountant is not upholding the importance of accounting ethics in their services to your business.
- Financial Statement Manipulation: Your accountant is manipulating your financial statements to improve the overall appearance of your business’s financial position. This can impact public trust in your business and result in your business facing legal charges.
- Embezzling Business Funds: Embezzlement of business funds is the act of stealing money from business accounts. This is a major offense to you and your business if your accountant is discovered to be stealing or misappropriating business funds.
- Fake Practicing Licence: Your accountant will be handling your business finances and offering you financial advice on what next financial decisions you need to make for the future of your business. If this is coming from an accountant who has lied about their qualifications and practicing licence, then you cannot trust the quality of their accounting service, advice, or ethics.
- Blackmail: If you find yourself in a position where your accountant is using confidential business information as blackmail for personal gain, it is important to immediately report the accountant and take restorative steps to mitigate the effects on you and your business.
If you notice any one of these signals, we recommend immediately acquiring new accounting services. Even if you slightly suspect that your accountant is not upholding the accounting ethical principles, it is important to re-evaluate their role in your business. SureBooks offers accounting services that you can rely on to be ethical.
SureBooks Accounting Services:
SureBooks is the small business accountant that you can be sure of. We offer accounting and financial management services that will secure your business for tomorrow. How we do this is by offering only ethical accounting services that place your business in a strong and financially safe position.
SureBooks is comprised of a team of highly qualified and expertly experienced accountants. SureBooks accountants are all ethical accounting practitioners and are dedicated to upholding the accounting ethical principles of integrity, objectivity, public interest, and nature of services. We are continuously improving our professional accounting knowledge and skills so that we are constantly aligned with the ethical principle of due care.
Paired with our expert and ethical team of accountants, we also use the latest cloud accounting software for our payroll and accounting services. The use of Xero enables us to handle your business accounting with greater financial management efficiency and allows you to access your business accounts easily and at any point. At SureBooks, we ensure that our accounting services are ethical and transparent so that you can be confident that SureBooks is the best accounting partnership for your business.
Many businesses often feel pressurised to continue services with an unethical accountant due to limited resources to hire another possibly more expensive accountant. With SureBooks, you have access to expert and ethical accountants and the latest accounting software at an affordable rate. We strive to ensure that every small business has access to ethical accounting with SureBooks accounting services.
If you are interested in partnering with SureBooks for ethical accounting services, expert financial advice specialised to your business, and an accounting service that provides lasting value, you can easily contact SureBooks. A friendly and professional SureBooks member will begin the process with you. If you do not have time for a quick phone call, you can easily fill in our onboarding form and we will contact you when most convenient for you.
SureBooks offers ethical payroll and accounting services that will be the trusted partner for your business.