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Ethics Are Key to Success

We've all seen and, in part, felt the impact the fallout of one-time corporate powerhouses Enron, Tyco, and WorldCom had on a multitude of industries, and ultimately, the economy on both a national and global level. As a direct result, in 2002, the Sarbanes-Oxley (SOX) Act was introduced, which imposed stricter regulations that have drastically changed the way corporations and their employees conduct business, especially accounting and finance professionals. Since this time, those in the finance and accounting profession have experienced an intense amount of blame and scrutiny for their lack of oversight on company's financial research and reporting.

Most finance and accounting professionals have undoubtedly wondered at some point what went wrong and how events like these can be prevented in the future so that their integrity is never questioned and their jobs are never in jeopardy. The answer is simple: ethical practices and behavior are the keys to success.

While the livelihood of any organization in any industry depends upon its financial health and stability, establishing this success comes down to those professionals directly responsible for monitoring and reporting a company's finances. The role of accounting and finance professionals is highly critical to the vitality of any organization. Companies today are looking for far more than acquiring professionals from the best schools who can offer the highest level of expertise — they look for ethical finance and accounting employees whose ability to work truthfully and honestly transcend the other qualities many think are as, or even more, essential.

In fact, recent research from LRN,, a leader in governance, ethics, and compliance management solutions, indicates that ethical lapses in the workplace may be putting corporations' reputations at risk. The data highlights that smart companies now are focusing their attention on cascading company values into actions at every level of the organization. In other words, they are creating a workforce of ethical leaders that prize good behavior over the singular pursuit of profit or power.

Being that it's not a perfect world, most professionals, no matter what industry they work in, are faced at one point or another with an ethical dilemma. With so much pressure on the financial and accounting industry, it's more important now than ever that professionals in this field are educated and qualified to provide the highest level of ethical services under any circumstances. According to LRN, one in four surveyed say that in the past six months, they have witnessed unethical, and even illegal, behavior where they work. These behaviors include: witnessing a colleague acting unethically, illegally, or in a harassing or discriminatory manner; and receiving unethical emails on the job.

Today's accountants need to be able to identify unethical behavior and to resolve ethical conflicts in a timely and appropriate way. They have a responsibility to mitigate actual conflicts of interest, to regularly communicate with business associates to avoid apparent conflicts of interest, to advise all parties of any potential conflicts, and to refrain from engaging in any conduct that would prejudice carrying out duties ethically. Quite simply, they must know to abstain from engaging in or supporting any activity that might discredit the profession.

Since there are no hard and fast rules to ethics, employers seek competent and credible applicants who can be identified by certain credentials. Today, the accounting industry offers its professionals with a wide variety of educational and informational tools for increasing awareness and practicing ethics. A number of organizations provide these educational opportunities and certifications necessary to help professionals succeed in the accounting and finance industry while maintaining their integrity.

Through the Institute of Management Accountants (IMA), professionals can become Certified Management Accountants (CMAs). The CMA credential is a professional designation for management accountants and financial managers that identifies a professional as having the highest ethical standards. Such distinction is important in today's economic climate.

From its inception, IMA has recognized that given the level of its members' responsibility, the need to act ethically is not an
option — it's a necessity. This commitment to ethical standards is part of the organization's legacy which continues today, and it has never been more important given what investors, employers, and workers have at stake — both wealth and jobs.

According to another LRN study, the most common prevention effort is a code of conduct. Those who obtain the CMA certification agree to adhere to IMA's strict code of ethics, which give employers and clients a high level of security, satisfaction, and comfort knowing the financial and accounting interests of their organization will be ensured. Through IMA's Statement of Ethical Professional Practice, members pledge to behave with honesty, fairness, objectivity, and responsibility and to encourage others in their organization to follow them. The Statement of Ethical Professional Practice also offers guidance for resolving ethical conflicts.

Clearly, the combination of research findings, such as LRN, and corporate scandals. such as Enron, calls into question how well companies are facing the challenge of educating their workforces on ethical business conduct and principled performance. Professionals and organizations should view these results as a strong indication that more work is required to inspire higher standards of behavior, trust, and confidence that reported incidents of unethical behavior will be acted upon. IMA clearly recognizes the accounting profession's responsibility to provide ethical guidelines by offering the IMA Ethics Series as a way to aid employees in the decision-making process for situations that involve ethical questions and the CMA certification to validate accounting and financial professional's mastery of the skills necessary to be a strategic business partner grounded in a strong ethical foundation.

Ethical values provide the foundation on which businesses facilitate and encourage public confidence in their products and services. In the accounting field, maintaining a strict code of professional conduct is essential to instilling this confidence in the public. Accountants and finance professionals will encounter situations in their jobs at some point or another and will need this ethical guidance to handle them effectively. By starting from the ground up, future "Enrons" can be avoided, saving perhaps thousands of jobs, billions of dollars, and maintaining the integrity of the accounting and finance profession in tandem.

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