Today is Global Ethics Day, an annual observance established seven years ago by the Carnegie Council for Ethics in International Affairs. Empowering ethics is this year’s theme, and it resonates. It captures an important call-to-action for individuals and institutions in an uncertain and volatile world.  As CEO and President of an association representing those in the accounting and finance profession, ethics is foundational to our mission and to the work of our membership. That is why the results of a September 2020 survey conducted by ACCA and IMA finding that one in five finance and accounting professionals had directly, or via a work colleague, encountered a situation where, as a result of Covid-19, ethics were at risk of compromise was eye-opening. The report also found “among those who experienced such situations, a quarter of issues related in some way to the use of technology.”

Technology’s impact on finance and accounting is a topic continually under scrutiny. For many it is a savior (eliminating manual and routine work, creating new ways of generating value), but it can also be viewed as a Pandora’s Box (with its users fearful of what unleashing it may bring – think the black box of AI often revealing itself as algorithmic bias). But no matter where you fall on the wide continuum of technology opportunity and risk, with Covid-19, technology became the mechanism by which society was able to work efficiently and relatively seamlessly. With lockdowns and other restrictions on being in a physical office, remote and hybrid work became more widespread than they have ever been in history.

But this rapid shift to online working did not come without problems. Data breaches became more common during Covid-19, and grew more expensive. According to a July IBM Global Security study, “data breaches now cost surveyed companies $4.24 million per incident on average – the highest cost in the 17-year history of the report.” Many companies (60% according to the IBM survey) rapidly shifted to cloud-based applications to facilitate remote work and information-sharing. IBM concludes, “security may have lagged behind these rapid IT changes, hindering organizations’ ability to respond to data breaches.” Additionally, occupational fraud may have been enabled during Covid-19 by greater employee access to information on cloud-based platforms, according to an April 2021 article by Ernst & Young.

Management Accountants’ Role in Shaping a New Post-Covid Finance Function

Data breaches and occupational fraud are the bad news stories of rapid implementation of technology during Covid-19. But they can be a “teaching moment” for management accountants, who set internal controls and compliance processes that prevent these ethical lapses from happening in the first place. They underscore the philosophy that “sometimes the best offense is a good defense.” Management accountants are that “defense,” and they will be the ones rebuilding and reshaping organizations for the new post-Covid workplace through their commitment to ethics education, detection, prevention and remediation (e.g., fraud risk management and internal controls).

Many of them are undertaking a rigorous post-mortem of what went right and what went wrong during Covid-19 and adjusting policies and controls appropriately. They learned there were some efficiencies and improvements made to certain processes like the financial close and audits when the process was undertaken remotely. For instance, reporting and auditing that were done in real-time eliminated the “crunch time” burden at the end of each reporting period, allowing more time for insightful analysis.

Ethics Enables Technology

Eliminating burdensome, repetitive work and finding new ways to create value (e.g., RPA, AI, machine learning) is the promise of technology, and despite the ethical lapses that can be enabled because of it, we should continue to pursue and implement technologies that add value to our work and ultimately for our stakeholders. But technology implementation devoid of organizational culture-building and ethics training invites malfeasance, so we must look at technology as an enterprise risk in order to optimize the opportunity it promises. In this way, ethics enables technology, creating the environment of trust and transparency needed for technology to be appropriately deployed.

CEOs need to take very seriously the “tone at the top” they set for their organizations. In discussing performance goals with employees, emphasizing that “how one gets there is as important as if one gets there, and the outcomes produced.” Formal ethics statements and principles can be helpful in serving as a model for how to behave ethically and offer a principles-based approach to ethics for every organization. This helps take the guesswork out of ethics.

But accountability for ethics is not just the purview of the CEO. It is an accountability for every executive, middle manager and line employee. If a new technology or process has opened up the door to unethical behavior, it is every employee’s responsibility to escalate the concern about unethical behavior through appropriate channels. That escalation process also needs to be clear and actionable.

Strong organizational cultures are the most important bulwarks against unethical practices and every employee is responsible for building and maintaining them, even as we realize the many benefits of advanced technologies. In this sense, technology is secondary to people (with a commitment to ethics) and processes (with a focus on risk management and internal controls).

We are all guardians of our brands and our profession, and as disruptions and technology enablement become more pervasive, we must take this obligation seriously, not just on Global Ethics Day, but every day.