I have been a certified public accountant for almost 30 years and have encountered various organizational pressures and politics as both an external and internal auditor. In "Ethics and Pressure, Balancing the Internal Audit Profession" (2015), the Institute of Internal Auditors defined organizational political pressure as a situation in which individuals use their authority to gain personal benefits or to protect an organization by trying to influence the audit activity or audit reports. This could involve actions such as restricting the scope of the audit, hiding findings or reports, instructing auditors to focus on lower-risk areas or to discredit the entity being audited, or undermining the credibility of auditors or the audit activity.
Professional accountants and auditors who are aware of these risks must find a delicate balance. Otherwise, they may experience reduced communication from stakeholders, discrimination, job loss, outsourcing, hostile work conditions, stressful environments, and/or denied or delayed requests. Furthermore, there is a risk of missed opportunities, being replaced, or transferred.
However, we have also seen a handful of professional accountants and auditors stand up and break the silence. Others become whistleblowers at great risk to their professional careers and personal lives. Why? According to Schilpzand, moral courage explains why an individual acts ethically when another person who arrives at the same ethical decision point and in the same position does not. Moral courage starts from one’s moral compass, that inner sense, that thing inside of us which tells us which direction we should go when we must make decisions involving right or wrong.
Organizationally, the following factors may thwart moral courage: an organizational culture that stifle discussion regarding unethical behaviors and tolerates unethical acts, a willingness to compromise personal and professional standards in order to avoid social isolation from peers or to secure a favor, an unwillingness to face the tough challenge of addressing unethical behaviors, an indifference to ethical values, the apathy of bystanders who lack the moral courage to take action, group think which supports a united decision to turn the other way when unethical behaviors are taking place, or the tendency to redefine unethical behaviors as acceptable.
This is why, in the accountancy profession, the importance given to our code of ethics is such that Philippine professional accountants recite our Oath as CPAs every time there is a PICPA event after the opening prayer and national anthem – for God, country, and profession. We are constantly reminded of the importance of upholding the highest standards of integrity, objectivity, professional competence, and due care, confidentiality, and professional behavior. Indeed, the credibility of the accountancy profession rises and falls in the active enforcement of its ethical standards.
But holding one’s ground and upholding moral courage is a very tough act to do! And Michael Woodford was once quoted, “If you know something is wrong and you chose to do nothing, you become complicit.”
We can establish the following safeguards to promote moral courage: knowing thyself (and one’s personal ethical and value system), being prepared, conducting due diligence about our organization or clients, developing the right skills in recognizing critical situations, emphasizing shared objectives, sticking to verified facts, and securing the appropriate charter or mandate. The following personal traits also support courageous actions: excellent communication skills, professionalism, calmness, a fair mind, courage and a strong ethical compass, and personal integrity.
In today’s transitioning environment, where everyone is so into artificial intelligence, cybersecurity, supply chain, diversity and belongingness, and sustainability, among others, the need to maintain and strengthen one’s moral compass and take courageous action is even more basic, so that we don’t lose ourselves in all these changes. Because once the dust has settled, organizational pressure and politics will remain. At the end of day, we must keep questioning ourselves: What would I do?
Mhycke C. Gallego is a member of the Philippine Institute of Certified Public Accountants and is currently the President of the Asian Confederation of Institutes of Internal Auditors. He is the Advisory Practice Leader of Punongbayan & Araullo (P&A Grant Thornton). The views and opinions expressed in this article are those of the writer and do not necessarily reflect the views and opinions of PICPA.