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Trust in the profession, individual members and transparency

Author: ICAEW Insights

Published: 24 May 2021

David Matthews, outgoing ICAEW President, says the need for trustworthy information is only increasing.

Individual chartered accountants and the profession collectively are at the centre of providing that information but there also needs to be a greater public understanding of the good that we do.

Chartered accountants enable businesses, organisations, and economies to achieve their financial and strategic goals – with rigour, integrity and vision. It is this very definition of the profession that brings us to the question of trust and what it means for both the profession and its members.

Historically, chartered accountants have acted as trusted advisors in the delivery of financial information – most obviously as preparers presenting high-quality information and auditors assuring that information on behalf of shareholders. More recently, the scope of this service has expanded to include non-financial information, including metrics on environmental, social and governance matters. And more recently, the concerns relating to trust in audit and corporate governance have made the subject of reform front and centre.

However, the profession is charged with much more than this. For example, chartered accountants providing tax services must not only display knowledge and ability in the work they do but be seen as ensuring that taxpayers pay the right amount of tax rather than being associated with aggressive tax planning. Those delivering business advice need to be mindful of ‘doing the right thing’ and be diligent against inadvertently facilitating money laundering or other illegal practices. Only if chartered accountants are seen to be “doing the right thing” will trust be maintained.

Being trustworthy is also increasingly at the front of consumers’ minds in their interaction with business. They want to know that the companies they buy from can be trusted to act ethically. Suppliers want to know that the businesses they supply treat their staff and client bases well. Investors want to know the businesses they invest in operate good governance. And virtually anyone that interacts with an organisation wants to know they can trust it with their data.

Questions of trust extend beyond the profession and business to journalism, government, NGOs and others. So, who can you trust? It is 21 years since David Maister published his ‘Trust Equation’ for professional services which sets out that Trustworthiness = (Credibility x Reliability x Intimacy)/Self-Orientation (or self-interest). He said that trust increases if credibility, reliability and intimacy increase, and self-orientation decreases.

This trust equation closely reflects ICAEW’s five fundamental principles of ethical behaviour: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. All of These principles have underpinned the work of ICAEW Chartered Accountants [since ICAEW was established in 1880], and significantly pre-date the Trust Equation.

In addition to these five behaviours expected of chartered accountants is the need for consistency of practice that comes with the longevity of the chartered accountancy profession. Since its inception, the profession has stood for the same principles of high-quality accountancy services provided by skilled professionals, who act in accordance with an ethical code. This consistency of who we are as a profession and what you can expect from our members determines the trust that is placed upon us.

So why is there still, potentially, a trust deficit? In part, this is because a relatively small number of high-profile examples of things going wrong dominates the narrative, which can ignore the much larger body of evidence of good practice. In my view, transparency is the key and we need to address how we articulate what chartered accountants do, how we identify and rectify things that don’t go right and win trust by dealing with difficult circumstances publicly.

We cannot rely on being trusted as a matter of right – it is not about calling on what has gone before. We will have to demonstrate trustworthiness going forward, as individuals, as the profession and in terms of what we do within businesses. 

We are also being challenged by a culture of misinformation, not least across social media, which often seeks and serves to undermine trust in institutions. We need to better understand and navigate these new digital channels, and effectively counter some of these often unfair and baseless narratives.

Then comes the question of how we make what we do more transparent, more visible. We have to find mechanisms for demonstrating transparency about outcomes. Individual behaviours are incredibly important. That’s why we expect individual members, not just in their professional life but also in their personal life to demonstrate the highest standards.

This brings us back to the role of individual accountants – as well as the profession as a whole – in earning trust. Individuals have the power to enhance or deplete the profession. That is why it is for us both alone and collectively to demonstrate the work that chartered accountants do and enhance public understanding and trust in our profession. 

Questions around public trust in companies, the profession, charities and government arise time and again. In a series of articles, ICAEW Insights unpacks the building blocks of trust, and how organisations build, maintain or rebuild trust.

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