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Accounting ethics in digital age - Coggle Diagram
Accounting ethics in digital age
Accountants require more than merely professional competence
There are many ethical dilemmas which are faced by contemporary accountants in the workplace
Some of them are easily resolved if the accountants regularly engage with others as these engagements are likely to improve accountant's ethical thinking by helping to view from different perspective
Challenges to the accountant as the digital age increase
Professional competence and due care
Reason: Digital age can present challenges which the accountant has not seen before
Lack of knowledge and understanding will create the risk of compromising the professional competence and due care
To behave ethically and instill trust, professional accountants need to learn relatively quickly and to apply their judgement to this information, often in situations they have not seen before
Other than being directly connected to the ethical situation that are personally experience, the professional accountants can be directly connected to the ethical situations by being an observer.
Data theft
Most immediate and common impact in the cybersecurity
Effects: Financial loss and reputation/brand damage
Hackers can expose the vulnerability in insecure database where commercial implementations have not yet been secured
IT Security
It is a technology issue
Accountants are custodian to the sensitive data and need to be aware of it
Types of treats include intimidation threats from hackers to misuse or destroy the data
Other than that, the ethical duty of confidentiality which would relate to employee or customers would be compromised.
Professional accountants need to be aware where there is information of value to external parties and should ensure there are controls to secure it
Data collection and analytics
The regulations on this is increasing
Organisations need to ensure the involvement of all relevant stakeholders
Accountants have the duty to ensure that regulations are understood and properly addressed
Accountants may be accused of failure to act with integrity, competence and due care if customer's data is misused
The organisation should be honest in the way it has obtained consent from its customers and should not compromise customer's confidentiality
When there has been a breach of security
In either their own organisation or in the one that they are advising
Accountants need to have heightened awareness when it comes to what action should they take
Given that accountants need to act in public interest, they can consider public disclosure such as informing customers when their personal information has been exposed
Platform-based business
They create value by bring together the customers and producers
They have limited number of their own inventory and do not necessarily need an increased number of employees to expand their business
They simply need to build up a substantial user base and connect them to a list of trusted specialist suppliers to provide them with the services
The suppliers might be contracted to work for the business and are not employees of the business
Therefore, this raise questions about employee protection and governance issue
Accountants need to evaluate whether the suppliers are being unfairly treated by the business
For example, whether they are the employees of the business and therefore are eligible for certain rights or whether they are the suppliers without such rights
Preventing unfair treatment of stakeholders is an issue for the accountant.
In this situation, there need to be balance between the commercial interest of business and the interests of suppliers and customers
Distributed ledger technology
Digital transactions for recording asset transactions
The transactions and their details will be recorded in multiple places at the same time
It is a digital database of records with info relevant to a group of participants
Unlike traditional database, distributed ledgers have no central data store or administration functionally
All participants are looking at the common, shared, view of records which are updated at the same time for all participants
This system will ensure that sensitive citizen data is not at risk
Such a system will affect a significant proportion of the population and could result in significant economic consequences if it went wrong.
Accountants will be required to have the knowledge of distributed ledgers and be able to assess the risk of hacking and other unauthorised access to data
Professional accountants must be honest whether they are comfortable with their knowledge of DLT and they may need to consider public interest when they are dealing with large volumes of sensitive data
Big data and AI
Can enable quicker, more consistent, evidence-based and accurate decisions
AI should be ethical, lawful and robust
However, the characteristics of AI create questions around the ethical use of new technologies
AI and machine learning technologies are rapidly transforming our lives. This will have deep ethical impact, which will both improve and destroy human lives
Accountants need to review the governance and assurance needed around AI so that all stakeholders will have confidence in its use
Accountants will face these ethical issues
Artificial intelligence, like human intelligence, may be used maliciously.
There are risks of bias in the system in unexpected and potentially detrimental ways.
AI will be a threat to certain categories of employment
There is the question of technical safety and failure.
Since the ethical principles are unchanged, then the challenge will be the compliance. A challenge is the lack of understanding around the contractual terms regarding the use of data
Various ways of addressing an ethical issue
The accountant must determine the nature of the decision that has to be made by determining the context of the ethical dilemma.
The accountant must determine whose rights and interests are affected by the decision
The accountant must determine the rules of professional practice, internal and external governance codes and relevant laws.
The accountant needs to set out the arguments in for and against taking a particular course of action
The accountant needs to formulate a solution that does justice to the arguments for and against the action to be taken.
The accountant needs to take into account any negative consequences of taking or not taking the action.