CONCLUCIONES Y RECOMENDACIONES

In this chapter, I have argued that the contemporary accounting profession operates within an economic paradigm of neo-liberal capitalism which is an economic system which provides us with an image of a person who is wholly divorced from social concerns as the ideal person. This economic system is also based on the idea that a human being is primarily a utility maximizer. On the other hand, under liberal capitalism, the economic sphere is deemed to be a private sphere which is not accountable to the generality of social existence. The main philosophy of neo-liberal capitalism is based on the philosophy that individuals should be left to pursue their economic interests without interference from government. I argued that in the philosophy of economic liberalism, the presumption is that the liberal economy will do well without interference from government.

My main aim in this chapter was not to provide an extensive discussion of the philosophy of economic liberalism, rather I wanted to demonstrate how economic liberalism has influenced the functioning of the accounting profession. Through the works of liberal economic thinkers such as Adam Smith and Philip Wicksteed, the main presumption of these classical liberal capitalistic thinkers was that the economy will do well without any interference from government because of selfish passions of individuals will ultimately promote the common good. For Adam Smith, the determining factor in the distribution of wealth in society was premised on the individual pursuit of self-interest. Philip Wicksteed went as far as asserting that economic relations were actually devoid of ethical evaluations. This implied that it was

42

not an economic concern whether someone was dishonest or cheating in his or her economic dealings with others. What was important was in making sure that the action that was taken ultimately led to an economic gain.

I have demonstrated that neo-liberal economic thinking is a systematic rational affirmation of classical liberal economic thinking in the aftermath of Adam Smith. Individual economic actions are deemed rational when they lead to utility maximization. The belief in utility maximization has given credence to the belief that economics was on par with natural sciences. The similarity between economics and natural sciences has been achieved through instrumental reasoning, a type of reasoning that ultimately discounts value judgements in the economic discipline. Without any value judgements, utility maximization becomes the only justifiable outcome of any economic action or transaction. It was part of the argument that was proffered in this chapter that economic reasoning is individualistic. Through the works of liberal thinkers such as Ayn Rand, Robert Nozick, Brittan and Heyne, just to mention a few, the idea of taxation was refuted on the grounds that it violated individuals’ freedom to use their incomes in a way they choose as individual qua individual. In this type of neo-liberal economic thinking, government is understood as there to protect individual properties.

Finally, in this chapter, I have argued that neo-liberal economic thinking has been adopted as the rationale behind the accounting profession. The accounting profession understands its main role as that of facilitating the expansion of neo-liberal capitalism within the financial sector. In this regard, the neo-liberal economic system has been divided into two camps – an economy of fixed assets that deals with goods and secondly the other economy which is contemporarily known as the global money market. In the global money market economy I have argued that through financial speculation, deception and cheating have become integral to the whole neo-liberal global financial system. In this regard, it was argued that the global

43

financial reporting is turned into an instrument of facilitating the movement of global capital. Thus other scholars have argued that the ideal of standardized accounting in the context of global neo-liberal capitalism has remained utopian. International monetary institutions such as the IMF and the World Bank are there to promote the economic interests of the developed countries at the expense of the underdeveloped countries. An ethical problem that was observed in this chapter is that the accounting profession in the context of global neo-liberal capitalism arises from the fact that such an economic system is corrupt by nature. Some of the multinational auditing companies such as the KPMG in South Africa have been embroiled in corruption in such a way that the many institutions such as banks and companies who relied on KPMG auditing services have come to question the reliability of KPMG’s auditing work.

Finally, the chapter discussed the issue of the ethics in the accounting profession, especially taking into account the fact that with the current globalization of neo-liberal capitalism the accounting profession has been embroiled in endless scandals all over the world. In this regard some scholars are arguing that accounting is not simply about keeping clean financial records of the company or organization, on the contrary, there is a need to inculcate a sense of ethical accountability among the accounting profession. False information leads to a general loss of professional integrity and the ultimate ruin of the accountant's professional career. Ethical values do provide social and communal orderliness in society and in all commercial undertakings. Auditing companies that have been embroiled in scandals have made it difficult to convince the general public and the global citizenship with regards to what they stand for and the reliability of their accounting information. One of the challenges that have been identified in this chapter is that of speculation. In this regard, I argued that speculation which is integral to neo-liberal capitalism is also a contributory factor to the

44

erosion of ethics in the accounting profession. It is for this reason that the following chapter will discuss ethics in the accounting profession.

CHAPTER THREE: ETHICS AND THE WORLD OF THE ACCOUNTING PROFESSION

3.1 Introduction

It is the general presumption that accountants are professional people and that as professional people they are expected to abide by ethical values that are deemed indispensable to the functioning of their profession. Ethics is popularly defined as a discipline that is mainly concerned with principles that help us as human beings to make a distinction between right and wrong in our relationship with each other within the generality of our human existence. In this regard, it is clear that ethics are found in all aspects of human life in the sense that they

45

provide some direction with regards to what is approved and disapproved by society or organisations as ethical or unethical behaviour. Professional ethics are a type of ethics that are usually seen as exclusive to the functioning of a particular profession. This implies that their main focus is on what is acceptable behaviour within a particular profession instead of society or all professions in general.

Since accounting is a profession, it logically functions under particular ethical values that are exclusive to the accounting profession and in relationship to societal expectations as to the type of behaviour which is condoned or not condoned within this profession. It is because of an ethic of exclusiveness that accounting profession like any other profession has its own professional code of ethics that is usually constructed around the ideal of the underlying values and obligations that are integral to the modus operandi of the accounting profession. These codes of ethics do usually set the accounting profession apart from other professions. For someone to be considered as an accountant, it is not entirely about the acquisition of the knowledge that is required for effective and efficient execution of one's duties within the accounting profession. Obviously, this understanding of professional ethics has some sociological underpinnings in as far as society understands the role of the accounting profession on the basis of its own social expectations. These social expectations are usually derived from what society presumes to be the underlying values that are integral to the accounting profession which usually finds its social legitimation from the acquiring of technical or abstract knowledge of the accounting profession. Professional ethics in accounting is based on those virtues that are expected from an accountant within his or her profession.

Whilst professional ethics in the world of the accounting profession is sometimes presumed to be a discourse that is universalisable, regardless of context, in this chapter I do intend to demonstrate that issues of unprofessionalism among the accountants have brought to the fore

46

the need to put into consideration the role that is played by socio-economic, cultural and political contexts in the conceptualisation and practice of the accounting profession in different parts of the world. To a greater degree, the issue of ethics within the accounting profession has remained problematic despite the fact that the acquiring of technical and abstract knowledge within the accounting profession is usually standardised. In this chapter, I am going to give an introductory discussion on ethics and the world of the accounting profession in a way that will serve as a foundation to my discussion of ethics and the accounting profession in our contemporary times which will serve as a foundation for further discussion in the following chapters.

Thus in the light of the orientation of this chapter as briefly stated above, the chapter has been divided into four sections. In the first section, I shall give a general discussion of the objectives of professional ethics and its relationship to the accounting profession. The second section will focus on the accountancy profession and its relevance to the economy and the role that is played by accountants and auditors in their professional responsibility. This section will be given a further extension in the third section in which it discusses the accounting profession with specific reference to society in the light of the concept of public interest which the accounting profession is expected to serve. The discussion of the concept of public interest and the accounting profession will be further echoed in section four where I provide a critical analysis of the codes of professional ethics and the role they serve in various professions whilst giving special attention to codes of ethics and the accounting profession.