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“If they have to wait until experience waves a magic wand over them then the profession is at risk”


Kyle Stevens-Cox, a third-year accounting and finance student


at Ryerson University’s Ted Rogers School of Management, appreciates the new ethics course the school has introduced. “It puts the standards in context and it has allowed us to under- stand how our choices affect each segment of business,” he says. “I didn’t understand the importance of ethics until I took the ethics class. Now that I have, I wish I could have taken it earlier.” There is certainly room for more and sooner, especially when


it comes to how decisions are made, says Susan Wolcott, PhD, CPA (US), CMA (US). Wolcott is also an independent scholar with WolcottLynch Associates and a thought leader with CPA Canada professional education. “We get people to the point where they analyze pretty thoroughly but we don’t get them to the point where they can really think carefully about the decision criteria, including values.” This is a problem, especially when you consider that up to


80% of audit work at the Big Four firms is done by people with fewer than five years’ audit experience, according to a 2014 report from the Canadian Public Accountability Board. The guidance they receive in school, then, is the touchstone for making those decisions. “If they don’t have the courses and they have to wait until experience waves a magic wand over them then the profession is at risk. The public is at risk,” says Len Brooks, professor of business ethics and accounting and the director of the Master of Management and Professional Accounting program at the University of Toronto Mississauga. CPA Canada’s new education program features a competency


map that includes both technical and enabling competencies such as professionalism and ethical behaviour. “CPAs draw on their ability to act with honesty, integrity, credibility, profes- sional confidence and independence, while coping with ambi- guity, conflicts of interest and the need to protect the public interest. That is the expectation,” says Tashia Batstone, vice- president, education services, CPA Canada. “When you look at the unique value proposition a CPA brings to the table, it’s the ability to utilize professional judgment and an ethical frame- work. It’s our mandate to protect the public. If the public loses confidence in our ability to act in an ethical manner, we have lost all credibility and value.” Sam Zhu, a fourth-year accounting student at York Univer-


sity’s Schulich School of Business, admits he hadn’t thought much about ethics other than with an eye to acting in a way that would keep him out of any scandalous headlines. But that has changed. “It’s not just about public perception but more about the choices I make and the reasons behind those choices.” A little background: the Enron, WorldCom and Arthur


Andersen scandals back in 2001 and 2002 triggered a lot of concern in the professional accounting community and in the


48 | CPA MAGAZINE | JANUARY/FEBRUARY 2016


university programs related to professional accounting in Canada and the US. In June 2004, the Association to Advance Collegiate Schools of Business (AACSB), the US-based body that accredits business and accounting programs, published its edu- cation task force report directing business schools seeking accreditation to bolster their courses on corporate governance, ethical decision-making, ethical leadership and the responsibil- ity of business in society. Eleven years later, the AACSB’s guide- lines have slowly taken hold to lesser and greater degrees. “If a school has a one-hour session on corporate governance


in a four-year undergraduate program, then it can truthfully say it includes the material in its program, but it falls well short of the expectation in the guidelines,” says Brooks. “New scandals put more pressure on those universities that don’t have signifi- cant education in these areas to do more. Part of this exercise in my view is to teach students how we got where we are in corpo- rate governance. We got Sarbanes-Oxley because of the Enron, WorldCom and Arthur Andersen scandals. The subprime crisis of 2008 resulted in the Dodd-Frank Act. I think it’s helpful for students not just to start out memorizing codes of conduct or statutes but to have an understanding of the history so that we don’t have to repeat it.” Wolcott, who designed the CPA Way, the professional judg-


ment model of the new CPA Professional Education Program, agrees. “I feel confident in saying virtually everyone who gradu- ates with an accounting degree has had to learn and make sense out of the code of ethics but that only gets you so far. WorldCom is a good example. The fraud was a basic accounting issue where profits weren’t where the managers wanted them to be, so they found an accountant who would ‘adjust’ the numbers. From a code of conduct perspective, making those entries is a violation. The problem is, what do you say if you’re a junior person and the managers are putting pressure on you? If you refuse to make the journal entry and someone else does, do you still have a responsibility? Do you keep quiet or leave the company? We want students to be able to communicate and to figure out how to handle and to practice dealing with those dilemmas so they aren’t confronted with them for the first time on the job. That’s what the CPA Way addresses.” The most common ethical dilemmas in public accounting


involve conflicts of interest, such as whether or not to accurately report your time when your performance evaluation is based on keeping to a budget, or turning a blind eye to anomalies when your client is a friend. This involves integrity and honesty and a willingness to pay a personal price for your values. “We adopted language called the CPA Mindset that focuses on values and how to apply them in making decisions,” says Wolcott. Business schools take their marching orders from the big


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