At a glance
The question of who to trust is especially pertinent at a time when levels of public confidence are on shaky ground across the globe.
Engendering trust is a key skill that accountants require now more than ever. In an era dominated by the spread of misinformation, and with technology reshaping the accounting industry, it is essential.
Two other skills are also of great importance for accountants in this “post-truth” era – critical thinking and a strong ethical framework.
It’s true that developing skills in each of these areas has long been fundamental to the accounting profession. However, the new challenges that emerge alongside technological advancement mean they should be front of mind when providing advice as trusted advisers.
Global communications firm Edelman surveys 32,000 people annually – 1150 each from 28 countries – for the Edelman Trust Barometer. Among the countries surveyed are Australia, Singapore, Mainland China, India, Indonesia, Malaysia, South Korea, the US, the UK and Japan.
The 2023 Edelman Trust Barometer report for Australia shows that 45 per cent say they trust the government to do the right thing – a 7 per cent drop since last year.
In addition, 54 per cent trust businesses, while 53 per cent trust non-government organisations, with the figures trending downwards in both categories. Australia’s overall trust score has dropped to 48 per cent, down from 53 per cent in 2022.
The picture is similar in Malaysia, where overall trust dropped from 66 per cent in 2022 to 62 per cent in 2023. Likewise in South Korea, where overall trust has dropped from 42 per cent in 2022 to 36 per cent in 2023.
Accountants rely on trust and credibility to perform their roles effectively, says Dr Simon Longstaff AO FCPA, executive director at The Ethics Centre.
To gain trust, it’s important to publicly declare the standard by which conduct is going to be judged, and act accordingly, he adds.
“You have to behave in a manner that is consistent with the standard that you have declared. You cannot selectively apply your core values and principles to tactical advantage. You must do it right across the board, otherwise you will not secure the dividends that come from high trust environments,” Longstaff says.
According to Professor Mandy Cheng FCPA, from the Business School of Accounting, Audit and Taxation at the University of New South Wales, the credibility of information, financial or not, is easily undermined in the current post-truth environment. This is where accountants play an important role.
“The prevalence of misinformation presents a significant challenge for businesses, unless accountants can ensure the accuracy and reliability of information going into both internal and external reporting,” Cheng says.
To achieve this, she says, it’s critical for them to build trusting relationships within their organisations.
“Without trust and these relationships, accountants cannot effectively perform their roles and provide valuable advice to their clients or stakeholders.
“It comes down to being able to show you have interrogated information and that it is accurate – that will build trust.”
2. Critical thinking
Emerging technologies, such as artificial intelligence (AI), can make it easier to manipulate financial data and create misleading or fraudulent reports.
“Fake news” also presents a significant challenge for businesses unless accountants can ensure the accuracy and reliability of information.
Accountants need to be aware of these risks and implement robust control mechanisms to detect and prevent financial data manipulation, says Brendan O’Connell FCPA, a member of the CPA Australia Centre of Excellence for Ethics and Professional Standards.
“Verifying the accuracy of financial data and information becomes more challenging in the face of AI,” adds O’Connell, who is also an honorary professor with RMIT University.
“Accountants must be vigilant in ensuring the sources and integrity of the information they use – and that is by using critical thinking and asking questions.”
Cheng adds that, while the advancements in technology present some risks, there are also many opportunities that could benefit accountants. The key is being able to understand how to use the technology and what questions to ask.
“Critical thinking is not only about being ‘critical’, but also about finding the business story,” Cheng explains.
“Being able to interpret the data in the unique context of the organisation – and make business decisions based on that data – is a skill accountants can use in the current environment.”
3. Ethical framework
Technological leaps, such as recent advances in generative AI, call for increased awareness of potential breaches of professional codes of conduct, says O’Connell.
“This includes accountants being fully aware of a particular piece of technology’s limitations and inherent biases, not only its potential for productivity gains.
“If they are not, or if they ignore them and provide advice based on those biases, then they’re potentially breaching their professional ethics obligations,” O’Connell says.
This includes the obligation to carry out their role with due diligence and care.
Integrating ethical considerations into the design, implementation and monitoring of AI systems is vital for accountants to navigate ethical challenges effectively, adds Longstaff.
“Ethics requires that you stop and think about what you’re doing and why you’re doing it,” says Longstaff.
“Fundamentally, accountants aim for truth. There’s no room for an attitude of ‘near enough is good enough’.
“It has got to be true, and the way you can determine that is by being curious about it and by consistently questioning things,” says Longstaff.
To learn more about developing your skills in the areas of ethics, critical thinking and trust, join more than 10,000 of your accounting and finance peers at CPA Virtual Congress 2023. Coming to a virtual environment near you in October 2023.