GROUP 7

TASK: DISCUSS ETHIC EDUCATION AND THE MAJOR FACTORS AFFECTING ETHICAL CHOICES OF ACCOUNTANTS IN ZAMBIA

Dawn of the 21st century

The worst was still however to come. This was the global financial crisis 0f 2008. Trillions of dollars lost and companies close

collapse. The big question now is “WHAT DO ALL

THESE EVENTS HAVE IN COME?”

THE HUGE OF INVOLVEMENT OF ACCOUNTING PROFESSIONALS

Dawn of the 21st century continued……….

Credibility Lost

The public lost confidence in accountants Professional accounting bodies strategize on how to restore

the confidence Rules and Regulations The profession was still under a lot of scrutiny Quest for a solution waged on

ETHICSAND ITS CORE VALUES!!

INTRODUCTIONDEFINITION OF ETHICS

The word ethics is derived from the Greek word “Ethos” which means character and a Latin word “moras” which means customs taken together these two words define how individuals choose to interact with one another

PURPOSE OF THIS DISCUSSION

Discuss Ethic education before and after the financial crisis The importance Its limitations Factors affecting ethical choices of accountants in Zambia

149418881907HISTORY OF ETHICS EDUCATION

1494. The father of accounting Luca Pacioli

2000’s1888. The American Association of Public

Accountants(AAPA) was created to develop professionalism.

1907. The AAPA changed its name to American institute of Certified Accountants (AICA) and delivered divisions of ethical principles.

These are;1. Independence 2. Objectivity3. Integrity4. Competence5. Professionalism

ACCOUNTING SCANDALS

Sarbanes and Oxley Act Of 2002

Passed by the American congress to protect the investors from fraudulent financial activities of the corporation

The act was mandated strictly to improve financial disclosures and prevent fraud

Aim was to restore investor confidence

ETHIC EDUCATION: POST GLOBAL FINANCIAL CRISIS

DYNAMICS OF BUSINESS

“THE BUSINESS WORLD WORKS LIKE A JIGSAW PUZZLE”UNFORTUNATELY… ONE CRITICAL PIECE WAS MISSING. This was ethics. Replaced instead with corporate greed

COMPANY PROFITS: PURE ECONOMICS?

OR PINOCIONOMICS

DODD FRANK ACT

INTERNATIONAL ASSOCIATION OF ETHIC EDUCATION (IAEE)

RISE OF ISLAMIC FINANCE

EDUCATION ACT AMENDMENT(S)

ETHICS AND ETHICS EDUCATION REFORMS

Ethics boosts shareholders confidence

Due to all the accounting scandals, accountants have long been thought of as the black sheep of the business world

But with ethicly driven efforts, such as good business practice, public relations and corporate social responsibility, this image can be forgotten and be replaced with a return in shareholder confidence

ETHICS IMPACT ON SHAREHOLDERS

A lack of ethics pierces investor confidence

Without ethics education

ORGANISATIONAL INFLUENCE

ETHICAL DECISION

WITH ETHICS EDUCATIONEthics in the profession acts as an effective countervailing power to organizational influence or power of authority

This was seen in the case of Zambia National Farmers Union

This is important in instances where a boss asks an accountant to manipulate figures so as to use larger figures and embezzle money to their benefit

Ethics in the accountancy profession ensures that people in the accounting field have a broader understanding of fraudulent conduct

Penalties of fraudulent activity- if found, are not strict and felt

Accountants engage in fraudulent conduct because they are in direct contact with the funds

Accountants and Auditors have informational advantage over those they serve.

This power asymmetry can be exploited to the advantage of the professional and thus there needs to be a corresponding sense of professional responsibility

Professional ethics provides the function of identifying moral hazards providing the appropriate evidence

LIMITATIONS OF ETHIC EDUCATION

What are Limitations?

“A limitation is a restriction or something that holds you back”

LIMITED MATERIAL OR INSUFFICIENT COVERAGE

Is ethics Important

?

Business Educators

Avoiding ethics in their courses or dealing with the topic only superficially

Being uncomfortable to discuss ethical issues in the classroom.

Fear of not leading by example deters them from teaching ethics

LACK OF PARENTAL INSTRUCTIONFamily plays a key role since an individual’s personality is shaped within family primarily by behaviours of parents

“A lack of parental instruction makes it hard for educators to impart knowledge about ethics in students because of the weak foundation”

Failure to take into account students ethic education background.

Educators have given little attention to students moral education background before entering into college or university classrooms

FIXED ETHICAL ATTITUDES

“The notion that every individual has got his or her own fixed ethical attitude which cannot be modified despite ethic education is a major objection of ethic education”

FACTORS AFFECTING ETHICAL CHOICES OF ACCOUNTANTS

There are many factors affecting choices of accountants. These can be classed into three main categories namely;

Individual Factors

Organisational Factors

Ultra-Oraganisational

Factors

INDIVIDUAL FACTORS

Social pressure and culture

moral obligation

educational factors Personal factors

ORGANISATIONAL FACTORS Top management support for ethical practice

Company code of ethics

Poor security controls

Organisational commitment

Remuneration structures

39%

61%

Cima survey 2015unsatisfied satisfied

ULTRA ORGANISATIONAL FACTORS

Government laws

Professional body code of ethics

RECOMMENDATIONS

Introduction of an ethics subject in the school curriculum in primary school e.g. similar to Mulenga and Jelita literature through the ministry of Education and organizations such as FAWEZA

Similar legislation such the SARBOX of 2002 and Dodd Frank of 2010 to deter accountants from malpractices in their profession and anyone who acts contrary to the provisions of the act must be prosecuted accordingly

In most organizations , there must be frequent seminars ,workshops for courses on ethics spearheaded by the Government in conjunction with organizations such as Transparency international Zambia and Anti corruption commission to sensitize the masses on the value of ethics as a professional.

CONCLUSION We highlighted what ethics education is ,its history and

evolution, how it was affected before and after the financial crisis, its importance ,limitations and possible recommendations

Despite there being limitations on how much can be done about individual ethical choices, ethics education has come a long way and has yielded positive results and is yet to yield even more positive results.

QUESTIONS?