The Chartered Institute of Management Accountants
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Ethical dilemma?
What should you do if you think you might be facing an ethical dilemma? How can you decide whether to take action?
If you think something might be unethical, you will need to think about the relevant facts, the ethical issues involved, the fundamental principles of CIMA's code of ethics that apply and internal company procedures. You can then identify and weigh up alternative courses of action, thinking about the consequences for those affected. What would be the outcome of going down a particular route? How would this compare with the alternatives?
An ethical dilemma exists when one or more principles of the code are threatened. You may have discovered something unethical, illegal or fraudulent going on where you work, or perhaps you feel that you have been asked to do something that compromises your professional integrity. Maybe someone is putting pressure on you to mislead, or to report in a way that is inconsistent or goes against accepted accounting standards.
Conflicts of interest and confidentiality issues are also ethical problems. In general, ethical issues should be dealt with by taking actions (called safeguards) to reduce them to a level where they are no longer significant or of any consequence.
If you are not sure whether something is significant, it can help to think about what a reasonable third party might think if they had the facts of the situation. How would you feel if someone you know discovered how you had acted? Would you feel proud or embarrassed by your actions?
Resolving ethical dilemmas
Whether you work in business, the public sector or in practice, the following is a process for addressing situations where you have discovered possible fraud or malpractice or where you feel your professional integrity is at risk. If, having read this guidance, you are still unsure what to do or would like to talk the matter through, contact CIMA's ethics helpline for more help.
1. Start by gathering all the relevant information so you can be sure of the facts and decide whether there really is an ethical problem.
2. Raise your concern internally. Your manager could be an appropriate person to approach, or you could speak to a trusted colleague. If these are not options, consider escalating the issue, such as to your manager's boss, to the Board, or perhaps to a non-executive director. There might also be an internal grievance or whistleblowing procedure you can follow. If you are in practice, raise your concern with the client, unless you suspect money laundering.
3. If you have raised the issue within the company, your concerns have not been addressed and you feel that it is a significant or persistent problem, you should think about reporting it externally. If you are in the UK, you should contact our whistleblowing advice line first. You could speak to your company’s auditors (if you have them) or contact the relevant trade, industry or regulatory authority. Remember that confidentiality still applies, and get legal advice to be sure of your obligations and rights.
4. Finally, if you have exhausted these avenues and you are still unable to resolve the ethical conflict, you should consider how you could remove yourself from the situation. Sometimes it might be enough to stop working with a particular team or client or to refuse to be associated with a misleading report. In the most extreme cases of significant unethical behaviour, however, where this is likely to continue despite your best efforts to resolve it, you may need to consider resigning. Again, legal advice will help to clarify your rights and obligations and should be sought before you take the step of resigning.
Throughout the process, document the steps you take to resolve the issue. For example, raise your concern in writing and keep copies of relevant correspondence. This will allow you to demonstrate how you dealt with the problem should you ever need to do so.
At any point you may wish to consult professional advice. This could be guidance from CIMA's ethics support services or from a trade or regulatory body, or it could be legal advice. CIMA's code of ethics describes the definitive ethical standards that members and students must uphold. Failure to do so is a disciplinary matter.
