On Integrity

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To maintain and broaden public confidence, members should perform all professional responsibilities with the highest sense of integrity.

Integrity is an element of character fundamental to professional recognition. It is the quality from which the public trust derives and the benchmark against which a member must ultimately test all decisions.

Integrity requires a member to be, among other things, honest and candid within the constraints of client confidentiality. Service and the public trust should not be subordinated to personal gain and advantage. Integrity can accommodate the inadvertent error and the honest difference of opinion; it cannot accommodate deceit or subordination of principle.

This, the third principle of CPAs’ professional code of ethics, deals with integrity. A person of integrity adheres firmly to the code of professional conduct. CPAs commit to integrity as a condition of participating in the CPA profession. Becoming a CPA does not give someone integrity; rather, integrity is an aspect of character that a person possesses before becoming a CPA or learns rapidly because that person desires the advantages of being a CPA.

Learning Integrity

Although some people seem to come by integrity naturally, most of us learn it through exposure to individuals with integrity or through immersion in social situations where integrity is valued and promoted. Institutional or work settings that reward dishonesty, greed, and duplicity—or settings that punish honesty, commitment to principle, and efforts to do the right thing—thwart individuals’ development of integrity. A profession whose foundation lies in its credibility should pay close attention to how its professional institutions and employers support or undermine integrity.

During my years in teaching, my students used to stumble over integrity. For them, it was like fine art: They couldn’t tell you what it was, but they thought they recognized it when they saw it. Our discussions of integrity would include examples of what they thought it meant, disagreements with one another about those examples, and modern idioms for integrity, including “Putting your money where your mouth is,” “Doing rather than talking,” “Calling them like you see them,” and “Walking the talk.” Although many people have difficulty talking about integrity apart from specific examples, few mistake that awful feeling of incompleteness or disjointedness that accompanies a breakdown in personal integrity or when personal integrity comes under attack.

People learn about integrity through formal education. Formal education also places individuals in circumstances where they can practice integrity in an academic setting, where opportunities for cheating and other dishonesty abound. Consequently, honor codes that rely on students’ integrity are important institutions of college life. Before CPA licensure required a college education, experience in a CPA firm substituted for both the intellectual and moral components of a college degree. After a college degree became required for licensure, the rationale for the experience requirement shifted somewhat to focus on exposing college graduates to the culture and ethics of the CPA profession. Many young CPAs learned about integrity from experienced partners personally, because it was common then for partners and staff to work closely together on audit engagements.

Changes in the Environment

Integrity in accounting practice was one-dimensional before the changes in competitive practices, beginning with the 1968 consent degree with the Federal Trade Commission. Before competitive bidding for clients, the “toughness” of the firm on accounting principles was the principal focus of integrity. The advent of price and market competition, however, introduced a second element of integrity: the survival of the firm. What difference did it make if you were tough on accounting principles if clients could easily switch firms? What would happen if clients began seeking the firm that would provide the most favorable accounting, while your firm stood tough? A viable firm was a prerequisite for the provision of any accounting services.

The stories from the 1950s and ’60s of firms walking away from clients over issues of accounting integrity and gaining even more clients because of their reputation for integrity could occur only in a one-dimensional world. The new environment and its competitive realities began to skew accountants’ loyalty to their firm and their clients’ well-being rather than to principles.

Today, the shapers of public opinion applaud when a CPA firm is tough on principles, confronting a client, forcing changes, or resigning over accounting issues. The newspapers print stories about such examples of integrity, and another story on the same page may link the same firm with a sensational accounting problem. The current situation creates confusion about integrity. Individual CPAs currently do not share a common understanding of what integrity means for their profession. But there is a clear directive in the principle quoted above: “Service and the public trust should not be subordinated to personal gain and advantage.”

With this as our mantra, let us rejuvenate our commitment to integrity by talking about it, reinstating it on our evaluations, and nurturing it through our formal education programs and the first two years of experience. Then, we would be walking the talk of our code of professional conduct.

Robert H. Colson, PhD, CPA




















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