How to master the Ethics in Practice scenarios

Behaving ethically is fundamental to a career in chartered accountancy. Every six months during your ACA training, you will discuss and document ethics scenarios with your Qualified Person Responsible for Training (QPRT), counsellor or principal. 

ICAEW has 18 Ethics in Practice scenarios to guide these discussions. The scenarios are “a set of situations, mostly based on real life, to illustrate types of ethical dilemmas that a trainee or qualified accountant might come upon”, says ICAEW Ethics Moderator Caroline Fox. “There is to some extent a ‘progression’ through them to correspond to the trainee accountant’s level of seniority. The scenarios are a way to bring ethics into their own world.”

Consider the ethical principles

Five fundamental principles are listed in the ICAEW code of ethics, and provide support in discussing the scenarios:

1. Integrity: to be straightforward and honest in all professional and business relationships.
2. Objectivity: not to comprise professional or business judgements because of bias, conflict of interest or undue influence of others.
3. Professional competence and due care: to attain and maintain professional knowledge at the level required for competent service, and to act diligently and in accordance with applicable technical and professional standards.
4. Confidentiality: to respect the confidentiality of information acquired through professional and business relationships.
5. Professional behaviour: to comply with relevant laws and regulations and avoid conduct which the professional accountant knows might discredit the profession. A consultation is currently underway to widen provisions.

These principles are a set of standards to follow but also “a critical friend; a support when something doesn’t feel right to think ‘why doesn’t it feel right’,” Caroline says. They help you approach ethical dilemmas in a methodical and strategic way by ‘training’ the logical thinking of situations. And they prompt you to consider what issues are at risk, who the different players are, and what you should and could do in this scenario.

The key feature of the Ethics in Practice scenarios is that they are discussed – they emphasise that ethics are “lived in”. Caroline adds: “Exams can only explore ethics so far. It is vital for there to be dialogue and constant reflection and reassessment.” In this way, the Ethics in Practice scenarios take the qualification “right into the hands of the trainees and their firms, but in a way that connects very much with what is going on in the exams themselves.” 

The scenarios also establish the good practice to debate and question throughout your career. “Thinking through a problem, applying judgement and arriving at a recommendation is a skillset that will form the backbone of many of the technical exams and help put students in good stead for those,” Caroline adds. “We want students to think on their feet.” 

Essential to achieving this is developing an open and questioning mindset that helps apply the five fundamental principles, and also allows you to make judgements that are “put on the line to be discussed, challenged and justified”, Caroline adds. And, over time, you will build resilience in asking the difficult questions. 

Take a methodical approach

Caroline recommends discussing the scenarios step-by-step and imagining what you would do in the shoes of the person affected. She gives the example of auditing a bank that your spouse has an account with. “Think about what is important. Is it important whether they have £5 million or £5 in the bank? Is it important if they see your computer? Is it important what role you have on the audit? Then tease into those issues that relate to the principles.”

She also recommends reflecting on whether there are situations you have come across in your own work experience where similar dilemmas have arisen. “In discussion with the person responsible for your training, you shouldn’t be afraid to ‘deviate’ if you have your own real world ethical issues,” she adds. “Discussing these would be equally valid.”

Actions to take are more specific. “Very often, for students, the first action is going to be referring to someone more senior,” Caroline explains. “You should always seek appropriate avenues for support or advice. It can be difficult if your firm is not supportive or, even worse, if people there are part of the ethical issue you are not comfortable with.” In this instance, there are confidential support services available, including the ICAEW Ethics Helpline or caba. “Documentation is vital,” she adds. “Always write up what action you have taken.”

Some dilemmas - such as money laundering - may have clear procedures to follow. “In which case, job done,” says Caroline. “But there will be actions where you want to think a bit wider. In your discussions with your employer, you will come up with what actions to take, and it will offer an opportunity for how to take issues forward in your particular firm.”

Ultimately, ethics is an area of continual learning and improvement during your career, and not something to be perfected. “We can guide and help and certainly there are rules, and we have that all in our syllabus, but it’s the questioning and professional judgement that you build up throughout your qualification that will be crucial,” Caroline concludes.

5 tips for approaching the Ethics in Practice scenarios

1. Consider questions raised at every step of the story.
2. Don’t always accept the first answer.
3. Think about context.
4. Question the provenance of information.
5. Refer back to the five fundamental principles.

Read the Student Insights guide to the Ethics Learning programme.