Shocking survey: Two-thirds of public finance officers have been pressurised to behave unethically

CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Its 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed.

This is their report on pressure on public finance officials being pressurised to behave unethically.

“Almost two thirds of finance professionals say they have come under pressure to act in an unethical way at some point in their careers, according to early findings from CIPFA’s ethics survey revealed today.

Of the 63% that said they had faced this kind of issue in the workplace, nearly half (47%) said it had happened once or twice, 29% between two and five times and 23% more than five times.

Pressure was exerted by line managers in 42% of cases, by chief executives or chief finance officers in 30% of cases, and board, cabinet or council in 15% of cases.

This was often done in the form of threats to bypass individuals for promotion and disciplinary action.

Respondents working in auditing firms were told that if they did not comply with a client’s wishes their bill might not be paid or they could lose out on future work.

Only 7% of respondents said they had carried out the unethical request and 29% said they had partially carried out the request. Almost two third (64%) said they had refused to act unethically or gave no answer.

Unethical experiences highlighted included excessive optimism in budgets and business cases, ‘getting around’ financial regulations, unreasonably downplaying risks and accounting for revenue as capital.

Among the comments submitted by respondents were that “ethics [is] seen as theoretical and discarded when convenient for senior management” and “commercialisation of local government is distorting the view of what ethical activity should be”.

The findings were based on 157 responses to the ethics survey as of 30 June. Eighty seven per cent of respondents were qualified accountants, while 73% were CIPFA qualified.

Four in ten respondents worked in local government, 20% in the NHS and the remainder from a variety of sectors including charities and audit firms.

Results were revealed by Rick Tazzini, a member of CIPFA’s ethics working group, at the CIPFA annual conference today. Tazzini said some of the issues were the “kind of things that got Carillion into trouble”.

The survey also revealed relatively low awareness of the code of ethics. Just 76% said they were aware of the code and less than half of these had read it recently.

Tazzini said he was expecting awareness of the code to have been higher.

“It’s a really important document for all of us as professionals,” he said.

Opening the session, Margaret Pratt said: “Every CIPFA colleague should be challenged to take their ethical temperature from time to time.”

She added that members needed to be equipped with “moral courage and resilience”.

Pressure on finance professionals was now greater than it ever has been, she said.

CIPFA’s ethics survey remains live and can be completed here. PF will be reporting on the full findings later in the year.”

https://www.publicfinance.co.uk/news/2018/07/majority-finance-professionals-pressured-acting-unethically-says-survey

2 thoughts on “Shocking survey: Two-thirds of public finance officers have been pressurised to behave unethically

  1. I have heard from people in the accountancy world of pressures being brought to bear on auditors. In some cases, it seems that accountancy firms are happy to go along with it. This won’t change until managing partners in accountancy firms are made criminally liable for such behaviour. It will be interesting to see what happens, if anything, to the people responsible for auditing Carillion.

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  2. “CIPFA … 14,000 members. … 157 responses to the ethics survey as of 30 June”

    I am not sure what to read into such a low response rate. It could be that only those who had been pressured felt motivated to respond – equally it could be that the vast majority of members really are not bothered about ethics.

    “Only 7% of respondents said they had carried out the unethical request and 29% said they had partially carried out the request. Almost two third (64%) said they had refused to act unethically or gave no answer.”

    Again, not sure what to think about those who refused to say whether they had acted unethically – but I think it is disingenuous to lump the “gave no answers” in with those who said they had “refused to act unethically”. We could easily assume that those who refused to answer did so because they did not want to admit to their regulatory body that they had done something bad, which would be a very different picture to the one presented above i.e. it could easily be that actually (say) 90% had carried out the unethical request either fully or partially.

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