When it comes to ethics in accounting the data is in and the numbers aren’t pretty! According to a global study on ethics by the Association of Chartered Certified Accountants (ACCA), 55% of accounting professionals surveyed said they have witnessed unethical behavior at some point in their careers and 25% said they have previously experienced pressure to act unethically. It’s no surprise then that 41% of respondents reported that ethical leadership and culture were top priorities at their organizations.

Sarah Lane, Head of Ethics and Assurance at ACCA responded to these findings in saying, “These insights underscore the need for robust ethical leadership and culture in organizations, and ongoing learning and development to support professional accountants in navigating these challenges.”

So, how can accounting and finance leaders combat these kinds of ethical challenges more effectively? Addressing today’s increasingly complex ethical issues requires strong leadership!

Understanding The Importance of Financial Leadership

A culture of strong ethics starts from above. Fostering a strong ethical culture requires that leaders:

• Act with integrity.
• Set a positive example.
• Align incentives with ethical behavior.
• Encourage employees to address ethical issues when they arise.

An ethical environment cannot be present when there’s no one at the top to ensure that ethical practices are being followed and integrity is being maintained throughout the organization. For this reason, it has become more important than ever before to have a trustworthy CFO or Controller at the helm of your company’s finances. If you don’t already have one, now is the time to hire a financial executive or utilize an outsourced financial leader to address today’s ever-evolving ethical challenges head on.

Using a Fractional Resource

If you do not yet have a dedicated CFO role, you can bring in a fractional CFO to bridge the gap until you can get a job description fleshed out and find the right fit for the position. Alternatively, you can lean on a fractional resource indefinitely to provide less-than-full-time financial leadership on an ongoing basis.

Outsourcing your financial leadership needs can be a cost-effective way to provide the financial oversight that you need to maintain a culture of strong ethics, but the value that an outsourced CFO can provide also includes:

• Impartiality

Hiring a third-party company to oversee your organization’s finances is one of the best ways to uphold strong organizational ethics because they don’t have a direct stake in the outcome of the business the way an in-house employee would. This impartiality helps them to truly act in the best interest of the company rather than for their own gain, which is critically important considering the unethical practices described in ACCA’s report included items like profitability pressure, personal incentives, and conflicts of interest.

• Strengthened Internal Controls

Using a third-party provider to handle your CFO or Controller role also inherently bolsters the internal controls at your company by segregating duties between in-house staff and outsourced financial leadership. The result is a greater buffer between areas of the business to mitigate the risk of financial fraud, which can include crimes like embezzlement, bribery, and tax fraud.

However, these benefits are only present when the outsourced CFO company you’re using is reputable. Find a provider that you can trust so you don’t have to worry about compromised ethics at your organization from an outside source either.

Taking the Next Step

When you need a part-time Controller to oversee your accounting team or a part-time CFO to implement a culture of ethical integrity, we can help! We bring the best senior finance and accounting talent to your business, which means you can count on us for the right solution at the right time. Our vast team of US-based consulting CFOs brings deep experience to every role to offer you unmatched expertise and reliability. When you choose our team, you’ll notice the CFO Selections difference immediately!

Contact us today for a complimentary consultation to find out more.