Thursday, September 23, 2010


It seems to me that every time I watch a television news program or pick up a newspaper the top story is about fraud, embezzlement or unethical behavior. I think that Henson Cargill really captured the essence of much of today’s ethics in a song titled “Skip a Rope.” The song goes, “Cheat on your taxes, don’t be a fool. Now what was that they said about a golden rule? Never mind the rules just play to win…” Cheating on your taxes, like the song says, is what everyone else does so why shouldn’t you? Whether it is pro sports or business, today’s philosophy is play to win even if you have to break the rules.

Tax fraud by unenrolled tax preparers has become so common place that the IRS is proposing a mandatory competency examination for anyone who prepares a tax return for a fee (CPAs, Attorneys and Enrolled Agents are exempted). The Unenrolled Tax Preparers initiative will also require each person to complete two hours of ethics training once they have passed the competency exam. Will that make them more ethical? I doubt it.

The Texas State Board of Public Accountancy requires me to take a four-hour ethics course every other year. My employer requires me to periodically read and sign a Code of Business Conduct and Ethics. Will those two activities make me more ethical, probably not? The reason is that I developed most of my understanding of right or wrong when I was growing up, as does everyone. But they do serve as good reminders of those moral and ethical values that I learned as a child.

I was recently involved in an investigation to determine if someone had cheated on a course final examination. Upon review, it appeared that, in fact, they had cheated on the exam. You guessed it. The topic of the course was professional ethics.

In business, employees tend to adopt the ethics of management. This is referred to as the “tone at the top” in the audit literature. Unethical behavior by management tends to filter down to the employees of the organization. Employees will assume that if it is okay for management to be unethical, then it is okay for them to act in the same way.

Are we more unethical today than our forefathers were 50 years ago? I am not sure. Maybe unethical behavior is just more visible today than in the past. So why does it seem that ethical behavior has deteriorated to the point where it is almost common place? I am not sure, but if you aren’t practicing ethical behavior each and every day you need to try to correct the problem and do better in the future. What do you think–are you ethical?

1 comment:

  1. Many states have made a mandatory requirement for CPAs to take an ethics course in every renewal period but as Winford mentioned such requirements cannot make one ethical.

    But I do believe that such requirements can help CPAs realize how important moral and ethical values are in their profession as their decisions impact their clients, IRS and the society as a whole.