Ethics & Professionalism in the Classroom :Ethics & Professionalism in the Classroom Ethics & Professionalism in Accounting
Deloitte/Federation of Schools of Accountancy Faculty Consortium
May 20, 2004 in Chicago
Prof. Len Brooks
Rotman School of Management, Univ. of Toronto
Ethics & Professionalism :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 Ethics & Professionalism Vision
Recent Scandals & Reform
Reputation
Success
Roles
Key values, characteristics and techniques
Governance expectations
Key classroom/learning issues
Further Info
Ethics & Professionalism :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 Ethics & Professionalism Perspective … Hopeful
Today some of us are extremely fortunate
We live in interesting times
We study business & professional ethics
We understand the problems
Remedial action is underway
Ethics & Professionalism :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 Ethics & Professionalism Reputation is Key
When I joined the profession
E & P, fiduciary duty, assurance role
80s & 90s
revenue growth, return, efficiency
Post-Enron
E & P, fiduciary duty, effectiveness
honesty, integrity, conflicts of interest …
Tylenol …what were they really selling?
What makes a good reputation? :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 What makes a good reputation? Credibility Reliability Trustworthiness Responsibility Corporate
Reputation Fombrun, p. 72 Stakeholders views are key
Accountability-Value-Culture Chain :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 Accountability-Value-Culture Chain GO CAUTION STOP CORPORATION ACTIONS BEHAVIOUR STAKEHOLDER
SCREEN INFLUENCES Primary Other ACHEIVEMENT OF
STRATEGIC OBJECTIVES Governance
Mechanism Formulation
of Strategic
Objectives Customers
Employees
Capital Markets
Current:
Shareholders
Lenders
Environmentalists
Host Communities
Governments
NGOs
Media DETERMINANTS OF VALUE…Success = f(Trust + Respect) CORPORATE CULTURE
VALUES
ETHICS PROGRAM &CODE
TOP MANAGEMENT SUPPORT
STAKEHOLDER SYNERGIES
CHARACTER PERCEPTION OF:
TRUST
RESPECT
RELATIVE IMPACT
RELATIVE SALIENCE
LOCAL CULTURE
Stakeholder Lessons :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 Stakeholder Lessons Ethical values that guide action are under scrutiny
Broad support is needed, not just by current management, or current shareholders
PAs really should serve the public - that is whom GAAP should protect
Lack of support leads to failure & reform - corporate governance, professional accounting
What does Corp. Gov. reform mean? :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 What does Corp. Gov. reform mean? Redefinition of roles & responsibilities
Agency, Fiduciary, ...
Rededication to ethical values
Development of new governance techniques
Ethical guidance & culture
Failsafe systems - whistleblower systems
Risk management - including ethics risks
Ethical decision making
What should a PA know? :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 What should a PA know? All of the story!
Why?
To fulfill their role as:
Assurance provider
Scorekeeper
Manager
Expert
Bringing E & P into the Classroom :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 Bringing E & P into the Classroom Urgency & Relevance Needed
Always a problem
Learning styles of business students:
YB4WAT (70%/61%)
Learning Objectives (75%/72%)
Where are they /have been /are going
Interaction/hooks…Cases (70%/61%)
But now we have
Enron, Arthur Andersen, WorldCom …
Reform of the accounting profession
Integrate or Stand-alone :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 Integrate or Stand-alone Yes!!!
Can you really cover the whole story through integration alone?
Not hardly!
For Success :Prof. Len Brooks, Rotman School of Management, University of Toronto, 2004 For Success Be Well
&
Be Ethical
For further info
Business & Professional Ethics for Directors, Executives &Professional Accountants
South-Western, a Division of Thomson Learning, 2004
brooks@rotman,utoronto.ca