Against the moral disintegration of 19th century secularised industrial society, France’s first professor of sociology and the key architect of the modern ‘social sciences’ – Emile Durkheim – proposed professions and organised ‘occupations’ as a remedy and the best way to “reawaken our moral sensibility” and “strengthen the moral character of society”.
Similarly, the 21st century began with scandals, scrutiny and criticism of the profession and auditing practice, and corporate behaviour more broadly. Against the moral disintegration within contemporary society, Durkheim’s aspirations are key to rethinking the ethical framework of professional practices. As part of Newcastle’s Responsible Business Seminars, we engaged academics and practitioners to reflect and build on our understanding of the meaning of ethics and professionalism within accountancy and contemporary society.
While Durkheim was writing as a response to the social and moral impact of the division of labour in the industrial age, modern society faces similarly profound changes and moral challenges. A range of social challenges – declining trust in institutions, disenfranchisement of young people, rise of populism, geopolitical tensions – could all be linked to the thinning of the moral fabric of societies. The technological innovations, such as artificial intelligence, are rapidly changing the economic and business landscape in which chartered accountants are working. Greater value is placed on the argument for efficiency gains and performance improvements, rather than on the social purpose and ethical considerations of practice.
Against the changing context, the seminar emphasized the following questions:
The seminar proposed a different way to think about professionalism and ethics by emphasizing:
As a result of recent turmoils in connection to corporate accounting scandals, Britain’s audit profession is facing fresh scrutiny. News headlines and late working hours are filled with by the work of the Competition and Market Authority, Sir John Kingman’s review of the industry’s watchdog and Sir Donald Brydon’s inquiry into the future of audit.
The Business, Energy and Industrial Strategy (BEIS) Select Committee received evidence from more than 70 organisations and individuals and held hearings inquiring into the future of audit. They have questioned academics, investors, audit committee Chairs, the big four, challenger firms, professional bodies and regulators – including Sir John Kingman and Sir Donald Brydon. MPs interrogated Carillion directors, pension regulators and KPMG and Deloitte auditors, as they accused them of “missed red flags, aggressive accounting and the pension deficit reaching nearly £1bn.”
As part of the hearings, ICAEW’s CEO Michael Izza also attended Parliament to give evidence and further discussed the recent concerns around the audit profession as highly complex issues – in need of urgent action in order to sustain public confidence.
These interrogations raise further questions about the purpose of audit, the centrality of human judgement and the capacities that are needed to make a good professional.
In light of recent concerns about the profession, we’ve seen a growing attention placed on implementing regulation, defining codes of ethics and following compliance standards, within firms and professional bodies.
While professional discussions and professional development programmes have attended to the centrality of ethics in practice, the space has been dominated by the terminology, like – “formulation, adoption, implementation, and application” and “to guarantee ethical behaviour”. Through such prism, ethics appears as an additional component to the nature of professional work and discussed in relation to its application to solving moral dilemmas. The way that ethics is generally discussed appears as an atomistic concept, generally perceived as the “application” of modern moral theories to business decision-making. The consequence of such a devolved way of looking at ethics is that it diminishes our ability to understand the meaning, purpose and ends of our everyday actions and the wider institutional and professional practice.
Ethics then consequently assumes a detached element of behaviour and the performance of compliance with certain principles of practice. This is currently visible in the way that ethics is communicated as a passive, detached activity that is related to – reflection on individual ‘biases’ that affect behaviour, to the solving of ethical dilemmas and rote learning of codes of conduct.pertaining to beliefs, purpose, intentions for action.
What these findings outline is the gap in current understanding between the existence of codes, rules and principles and what needs to happen in order for these to have bearing on morality.
“Culture is constitutive of meaning because everyday practices of meaning making draw from symbolic systems “already ‘there,’ deeply entrenched in culture and language” (Bruner, 1990)
Cultural signals, arguments and language are significant in the way that they inform the way that we think about the profession and its role in society. The emphasis on automation and codification has been a major theme in many books, articles and social media, which has re-focused our attention on technique and processes and diminished the opportunity for important normative discussions.
Therefore, we need to think holistically and design the cultural resources, messages and experiences that impact the development, motivations and formation of young professionals.
Within the current conditions of work in practice, ethical knowledge or competence has seen a shift toward reduction and codification. Rapid technological changes have challenged the notion of professional expertise by reducing it to objectively-technical and morally-ambivalent practice, – therefore codifiable and reducible to algorithm.
With the advancements in robotic process automation, data analytics and machine learning, more attention is given to the possibility of automating and replicating human activities and replacing professional tasks by machines, mainly to achieve economic gain. Futuristic scenarios have emphasized the ‘threat’ of automating major tasks of certain professions. With such attention given entirely on the abilities of artificial intelligence, predictions and codification, we have subtracted the need for human judgment and reverted our attention away from practices that could foster independent rational agency. Furthermore, this shift toward algorithmic knowing has reduced our abilities and resources to engage in ethical discussions about ‘what is the purpose of tasks’ and ‘what should be done’…rather than ‘what can be done’.
On the basis of these outlined concerns, it is important to create the space and build on the resources that could reform the conceptual capacities and abilities to engage in moral appraisals of actions. We need to think about what is the ethical foundation of the profession and who should hold the normative space in defining its role and leading it forward.
A growing number of scholars have tried to bring attention to a the concept of professionalism and the centrality of ethics, however these terms remain impoverished in the way they become used in the world of work. We bring attention specifically to the philosophical work of Alasdair MacIntyre who has argued against the mechanistic view of ethics and points to the need to reform human rationality and moral agency within practice. His work opens up the possibility to reform the way that we understand professional practice as purposeful and meaningful.
MacIntyre’s thesis points to a number of concerns regarding modern practice, which we found to have direct implication on the accountancy profession:
When ethics is devolved from practice and is limited to implementing and complying with rules, then it only becomes an outward performance act. Such view of ethics divorced from practice, MacIntyre argues, has no bearing on the cognitive capacities and motivations of individuals to follow ethics codes, which then regulates only performativity and meaningless learning of words.
Rules and codes cannot predict all possible situations and provide agency or knowledge for adequate actions. The motivation and agency to follow them cannot come from the rules themselves but from the objective and purpose from which they are derived. To understand the objective and purpose requires conceptual (cognitive) capacities.
Therefore, ‘moral excellence’ could be described as pertaining to 1) the development of capacities of judgment based on the ability to evaluate the underlying reasons and to understand the end purpose of an activity and 2) moral agency that is based on one’s understanding of the human goods that particular actions/laws/principles enable us to achieve.
“Practices also require the exercise of technical skills, but a practice is much more than just a set of such skills: it is an entire conception of ends and goods which those skills serve and enrich. Practices must also be contrasted with institutions, which “are characteristically and necessarily concerned with … external goods” (MacIntyre, 2011, 194).
By engaging with the concept of ‘practice’ we could begin to bring back and embed ethics as a way of thinking about purpose (telos) – the goods and ends that our skills and activities serve.
If we were to rethink the accountancy profession through the concept of “practice” – we could start to think of ‘ethics’ not as a process or application, but as a way to think about the incommensurable goods (human goods) that it provides to the society it serves.
Such examples is given by Michael Pakaluk in Accounting Ethics, where he aims to define the professions around the honorable goods they exist to provide to society.
At the heart of MacIntyre’s thesis is a constructive attempt to help us recover the resources constitutive of our ability to act intelligibly
In order to foster agency, improve understanding and motivation in practitioners, it is important to enable and engage individuals in understanding, discussing and making meaning of their work and professional roles. Creating the conditions for purposeful (teleological) deliberation within the community of practitioners, brings back ethics at the heart of all human action and practical reasoning, and enables understanding of ends and purposes of daily activities and work. This further provides the conditions that foster a particular appreciation and internalisation of way of thinking, reasoning and justifying that helps individuals to seek meaning and improve the way that they work.
The act of deliberation (referred to by MacIntyre as engaging in ‘politics’), helps individuals to develop the capacity to grasp the purpose (telos) of practices, and then to commit to the reasons that ground ethical principles within practice. The understanding the teleology (purpose) of human practices requires certain capacities of judgment that can be fostered through purposeful deliberation about the underlying reasons and the end purpose of an activity.
Through AuditFutures, we have created such space for deliberation in order to foster reflective practitioners, by using ‘philosophical enquiry’ as a practical deliberative framework and placing emphasis on the cultivation of conceptual capacities and reasoning abilities. As an example of constructivist pedagogy, philosophical enquiry in the accounting context has shown to motivate, create interest, problematise the technical aspects and perceived objectivity of the field.
As a practical application of what MacIntyre calls ‘deliberative practice’, AuditFutures has become a platform that engages in a community of philosophical enquiry, in order to reform ethical foundation of practice and to cultivate the habits of reasoning, thinking and reflecting. This practical framework is important to the accounting context, as it challenges the dominant way of thinking in the field – by empowering individuals to participate in a democratic discourse that questions the normative aspects of the accounting ‘practice’ and the goods that it provides to society.
The foresight projects of AuditFutures have aimed to create the conditions that enable risk taking, meaning-making and development of capacities for critical thinking. The aim of these initiatives has been to create the conditions that could reform morality and rebuild cohesion in the profession – through which people come together to make sense and question their practice, and think of innovative ways to work and achieve the purpose of accounting in the 21st century society.
Some of the key projects that we have designed are built around the notion of purposeful deliberation, innovation and motivation:
ICAEW is creating a reflective space for young professionals to rethink the social role and purpose of the profession and to discuss fresh ideas for the future. Through facilitated and interactive discussion, each session will explore a range of current issues and will provide practical tools and approaches that will help develop creative and critical thinking.
Philosophy for Accountancy (P4A) is a successful university intervention that we have developed as part of leading accountancy degree programmes in the UK. Over the past several years, we have engaged students in active seminars that use constructivist methods of learning in order to improve their critical and creative thinking. Through the integrated philosophy seminars and curriculum planning, we have expanded and humanised the understanding of financial tools, procedures and regulations. By creating a normative culture of community-of-inquiry, our aim has been to 1) inform students’ moral beliefs about the profession, 2) challenge their pre-existing, culturally-informed values and 3) motivate them by engaging them in a socialised, problem-based learning project.
The ambition of this project is to engage the profession in a critical and reflective discussion on the nature of professionalism and to put a human face to the profession, with role models to inspire people in our sphere of work. Our profession is not famous for its heroes and client confidentiality prevents inspirational stories from reaching the public consciousness. The accountant who is a good professional will not draw attention to his own good actions, while the people who benefit most from his work will remain unaware that they have benefitted.
We are hosting several workshops to explore a range of current issues and to develop tools and approaches that will help develop creative and critical thinking.Read more
A thought-piece by Martin Martinoff on the urgent need to revive professionalismRead more
This report as a practical tool to facilitate discussions into the nature of being professionalRead more
In 2014 we partnered with the RSA to articulate a vision for audit and a better society. The key messages are indeed inspiring for the profession today.Read more
We took part in the 2017 IVBEC Conference on Professional and Business EthicsRead more