By MIA Sustainability, Digital Economy and Reporting Team & Nazatul Izma
Ethics is increasingly taking a front-seat as the profession reflects on what good governance looks like for technologically enabled accountants who live and work in the digital economy.
This was the main theme addressed in the MIA Digital Month 2023 panel on Ethical Leadership in a Digital Era moderated by the Chair of MIA Digital Technology Implementation Committee (DTIC) Lim Fen Nee recently. The panel also featured Justin Ong, Executive Director, Deloitte Malaysia Risk Advisory; Ravindran Navaratnam, Former chair and current member of MIA Ethics Standards Board (ESB); and Josephine Phan, member of the MIA DTIC.
The following are some key takeaways from the panel session.
Inculcating a culture of ethics is crucial
According to Lim, ethical practice is fundamental because it contributes to public trust and confidence in the profession. It is the accountant’s responsibility, added Navaratnam i.e. to practise ethics when using technology or otherwise.
Some people may be born more ethical than others. However, it is important to have an ecosystem that encourages ethical practice at all times and that creates ethical professionals who strengthen that ecosystem.
Ethical leadership is something that can and should be practiced by everyone, even when it is not rewarded. “Ethical leadership is not just for leaders, but for all users of technology,” stressed Phan. “Build digital trust with your stakeholders. Basically, it’s about adopting technology with accountability and responsibility beyond compliance.”
“Your ethical standards, your professional standards, is what you do when no one is looking,” added Navaratnam. “Ethics are not philosophy. It’s really asking what are the actions that you can implement in your day-to-day routine, your work culture, your corporate culture, that will sustain, preserve, and enhance ethical standards?”
One way to promote this ecosystem is by spelling out what ethical conduct means within an organisation. This includes promoting certain principles of ethical conduct, such as accountability, or encouraging accountants to proactively speak up and report any wrongdoings.
Organisations as well as public practitioners are advised to refer to the MIA By-Laws (On Professional Ethics, Conduct and Practice) and relevant guidance to flesh out a framework for ethics. Lim emphasised that the MIA By-Laws promotes five tenets of professionalism — namely, integrity, objectivity, professional competence/due care, confidentiality and professional behaviour. As the regulator of the profession, MIA will also be releasing a non-authoritative guidance on ethical conduct for accountants in public practice on using technology.
It is critical to consistently enforce ethical conduct
Weak enforcement and neglect of ethical conduct contribute to ethical risks. “We all have a SOP (standard operating procedure) in place, but we don’t always enforce it,” noted Ong.
How can enforcement be enhanced? Organisations should harness carrots and sticks effectively to ensure that there is no breach of the ethical floor and that employees hold themselves to the highest ethical standards possible. “There is no upward line [or ethical ceiling] to be breached,” said Navaratnam.
Education and raising awareness play a tremendous role in instilling ethics. As such, MIA strongly advocates for ethics in its professional development programmes so that members are informed of the right thing to do and the reasons for strictly upholding ethics. Accountants must understand the implications of ethical breaches, explained Phan, because “we do the right thing when we know why we are doing it.”
Be aware of the vast range of ethical digital risks
As technologies evolve, accountants need to be sensitive to the emerging risks. This includes countering potential bias in artificial intelligence, as well as conducting due diligence to determine that data or any other technological output used comes from credible and ethical sources.
Prepare sufficient financing and facilitate change management to promote ethical usage of technology
Accountants should also harness their financing expertise to allocate sufficient budgets for funding secure data systems, upskilling staff and creating an ethical digital culture. This is more critical than ever post-COVID; not only there is greater adoption of technology, according to Ong, but there is higher risk of private data being vulnerable as more employees are working from home.
Proper change management also needs to be in place to clarify what technology is being deployed in the organisation, what roles and processes have changed as a result, and what digital training is required going forward.
Commit to continuous learning
Accountants have a steep but necessary learning curve ahead of them to remain relevant. As such, MIA places a keen emphasis on digital adoption and education to upskill members to be future-fit for the digital economy. Upskilling and competency building will be especially critical to ensure that accountants are conversant with the ethical and systemic risks surrounding digital transformation and the impacts on good governance.
Embrace Strategic Collaboration
Granted, not everyone will be able to become experts in all technologies and the risks it poses, especially not overnight. “The key thing is working closely in collaboration with internal stakeholders and talking to subject matter experts within the organisation if you have the expertise to do that, or you may need to reach out,” advised Phan. This is synergistic with MIA’s advocacy for strategic collaboration in key areas, particularly digital adaptation for the future relevance for the profession.