The purpose of this project is for our group to gain a better understanding of how COVID-19 has affected the ethical standards and practices of the accounting industry, and what managers can do to adhere to ethical standards during a time where businesses are trying to stay afloat.

References

ACCA. (2020, October). Ethics in a COVID-19 World. https://www.accaglobal.com/content/dam/ACCA_Global/professional-insights/TECHNICAL/PI-Ethics-COVID-19.pdf.

This article talks about how COVID-19 has changed the ethical lives of accountants. It has surveys done by over 500 hundred people that have seen COVID 19 affect their ethics and if they can see it ruining their ethics for years to come. The main topic of this article is how ethics are getting compromised by the pandemic and what is to come in the future because of it. Within the article, there are eight examples on what changes have already happened and what are going to happen. This is effective to our research because our topic is on ethics in accounting and the pressure the pandemic has put on businesses, it changes the ethical future of accounting. Meaning that if accountants begin to work fully virtual, the ethical skills involved with the job will diminish.

Baud, C., Brivot, M., & Himick, D. (2021). Accounting Ethics and the Fragmentation of Value. Journal of Business Ethics, 168(2), 373–387.

This article is a scientific, research-based methodology where the author(s) are trying to establish what it means to be “ethical” or to “do the right thing” in the accounting profession, and the different moral stances other individuals take when deciding to make ethical decisions. They read numerous articles published by CPA Canada where instances of accounting fraud or unethical conduct were described. Then, they sorted or “coded” the articles into 5 categories based on Nagel’s five reasons for action (utility, perfectionist ends, general duties, private commitment, and specific obligations). The articles were sorted into these categories based on how the article’s author encouraged readers to think about ethics and decision-making from a moral standpoint. This article is helpful to our research because in order to discuss ethics in accounting, we need an understanding of what it actually means to be ethical, and we need to recognize that individuals choose to be ethical for different reasons (pertaining to Nagel’s five reasons for action).

FRC, & IESBA. (2021, January 26). Ethical and Auditing Implications Arising from Government-Backed Covid-19 Business Support Schemes. IFAC.

This article provides many examples of ways that COVID 19 relief may create ethical issues for accountants. The article starts by highlighting the importance of accountants acting ethically regarding applying for government covid support. An example of this would be that the accountant needs to be honest when supporting any financial positions management is claiming when applying for Covid funding.  From there the article discusses how accountants can make sure the use of funding received is ethical. Lastly the article highlights the ethical issues COVID has created for accountants related to financial reporting and auditing. An example provided by the article would be that accountants need to assess and report honestly about the implications of government funding on financial statements. This is important to our research because understanding what situations COVID-19 has created that put accountants into positions where the ethics of their work can be put into question will allow us to better understand the impact COVID-19 has had on the accounting industries ethically.

GHANDAR, A. (2020). The heightened risk of FRAUD in the COVID era. Acuity, 7(5), 59–61.

This article describes a heightened risk of fraud due to the COVID-19 pandemic. Because jobs are on the line, fraud has become more rationalized in people’s minds, and accountants and auditors must be prepared for this. The effects of the pandemic have created opportunity, motive, and means, which are the 3 elements needed to commit fraud. Businesses have shifted focus to staying afloat rather than focusing on internal controls and audits. During a time of heightened fraud risk, auditors need to consider different tactics being used, such as approaches to revenue recognition, expense deferrals, or siphoning money from accounts payable, payroll, etc. This article is important to our research because it describes how the role of the auditor has changed during the COVID-19 era. It is also important that companies and businesses still find a way to stay ethical while they are being impacted by the pandemic.

Gunz, S., & Thorne, L. (2020). Thematic Symposium: The Impact of Technology on Ethics, Professionalism and Judgement in Accounting. Journal of Business Ethics, 167(2), 153–155.

This article brings up the important question of “are humans more likely to lie to a machine rather than another person?” In that the accounting industry has always adapted to the changes in technology, but now they are needing to adapt to the addition of AI to the world of accounting. Ethics could be brought into question as the computer would only process what the accountant fed it. The morality of the machine would be the morality of the person entering data, or the detective controlling the machine, is the idea the end of the article presents as well. They conclude that AI itself cannot replace the ethical standpoint of a physical accountant, and that the accountant needs to be present in the work side by side with AI. To our project, this is huge, as if AI is supposed to take over in our field, we should know and project the predicted future they will be a part of side by side with us.

Ionescu, L. (2010). Exploring the Ethics of Accounting. Contemporary Readings in Law & Social Justice, 2(1), 158–163.

This article highlights several different factors that affect ethics in accounting. The article states “the characteristics and dynamics of the groups to which accountants belong may affect the way in which individual accountants encounter and resolve ethical dilemmas.” This is a very important quote in relation to our research. For us to understand how COVID-19 has affected the ethical practices of the accounting industry we must 1^st understand that the way an accountant will handle ethical issues depends on those around them. However, that is only the 1^st layer in understanding ethics that there is a relationship between the way individual accountants ethical thinking and the organization to which the accountant belongs. “Accountants respond to similar ethical issues in a different way depending on the cognitive context within which they are experienced or encountered.” At a more general level this article discusses that the whole company must actively implement a culture of ethical responsibility that may be connected to long term success.

Shu-Hui Su, Chen Kan, & Hui-Ling Yang. (2010). Cross-Cultural Difference and Accounting Ethics: An Empirical Study for Accounting Students. International Journal of Organizational Innovation, 2(3), 161–185.

This article is a study examining the cross-cultural differences in ethical perceptions of accountants, which is measured by the differences in reactions accounting students from Taiwan and the U.S. have towards a set of ethical dilemmas involving whistle blowing. It is thought that accounting students are a better demographic to study due to having not yet been exposed to the workplace culture, and therefore ethical variation is more likely to be a result of their cultural origin. It is also noted that “ethical views demonstrated by college students shape the basis of future ethical behavior by professionals and managers.” The paper contends that “Ethical diversity is related to cultural diversity.” The U.S. and Taiwan were each chosen for their individualistic and collectivist cultures respectively, which is thought to have a large influence on a culture’s overall propensity for individuals to engage in whistleblowing. Other cultural differences of importance are noted as well, such as whether a society is low or high-power distance and whether a society is a high or low uncertainty avoidance one. The findings of the study suggest that Taiwanese students would be less likely to whistle blow as opposed to their U.S. counterparts, despite Taiwanese students having received ethical education at higher rates than those in the U.S. It was also found that female students were more likely to whistle blow than male students. Finally, it was found that students who had taken an ethics course did not have a significantly different ethical attitude than those who did not take an ethics course. This article provides valuable insight on what are some of the high-impact factors of the ethical capacity of accountants, and points towards feminine and individualistic values as an indicator of ethical capacity for accountants. It is important to our research that we are able to identify cultural and other demographic differences which correlate with ethical accounting, especially given the vast diversity of culture throughout the U.S., and the wide spectrum of available corporate cultures in which there is large variation of collectivism vs. individualism, power distance and uncertainty avoidance.

Riley Engels, Chris Hansen, Cody Oakes, Sam Scoville, Emma Stalder