This was one of the findings of a CIMA survey, which investigated how accountants deal with ethical issues in the work place. It said that currently the Act did not encourage accountants to report unethical behaviour, furthermore accountants were far more likely to take a defensive or neutral position when it came to ethical dilemmas than follow a proactive, moral agenda.
Mandie Lavin, director of professional standards at CIMA believes the Act is essentially sound, but that it requires a balanced approach for it to be effective.
‘The Act is not meant to allow people to go ahead with reckless allegations. It emphasises taking precautions and preventing malicious allegations,’ she says.
The alleged inadequacies of the Act could be related to teething problems given the fact that it only came into force on 2 July last year. Accountants surveyed also singled out the six professional accounting bodies, saying they did not provide sufficient support for whistleblowers.
Lavin believes the act is still finding its feet. She says said the legislation has yet to be imbedded in society, but stresses the whistleblowing Act was not meant to be a substitute for internal company procedures.
While the Act is generally well known throughout the public sector, it has yet to become embedded in private sector consciousness. Companies that already have systems in place for employee grievances will be in the best position to comply with the act.
‘Any company with sound corporate governance should already be in a good position to meet the requirements of the Act. Companies need to have good systems in place, like employer tribunals, where ethical issues can be resolved,’ says Lavin.
In fact that the Public Interest Disclosure Act emphasises the need for employees discussing their concerns ‘in the workplace’, rather than seek help outside the workplace. The spirit of the Act encourages employees not to cover up malpractice, but uncover it without fear of retribution.
Another possible reason for the response of the accountants is the term ‘whistleblower’, which still carries negative connotations. This is an attitude, which will not change overtime. Many accountants might feel that blowing the whistle on their company could be a career-limiting move. Lavin says that in many circumstances employees find themselves in a ‘no-win situation’.
‘Being a whistleblower can seriously hamper your career-path,’ she says. Certainly this was the case for high-profile whistleblowers like Antonio Fernandes.
Fernandes, the former financial controller of telecommunications company Netcom Consultants UK, has struggled to find a new job since being fired as financial controller the day after he claimed that the Managing Director was trying to get him to sign off bogus expense claims.
The CIMA report recommends a number of corrective steps to ensure that accountants adopt a more proactive and moral approach in dealing with ethical issues at work.
It suggested forums should be introduced in the workplace where accountants can seek advice on ethical issues, and this seems to correspond with Lavin’s claim that organisations need to have the right systems in place where employees can discuss their concerns.
Another important recommendation is the need to include material, which encourages moral agency, in training and curriculum.
Lavin was critical of the professional accounting bodies who she feels are very good at putting out documents on changing legislation, but do not give accountants any on-hands practical training.
‘Whistleblowing is a complex issue. Employees need to be given a mandate for expressing their views, while at the same time be guaranteed their careers will not be jeopardised.’
Despite the concerns of accountants in the survey, much of the response to the new act remains positive. While, whistleblowing still leaves a bad taste in the mouth for most companies, the introduction of legislation to protect those employees who expose their company’s wrongdoings is fast becoming an international trend.
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