Such self-assessment can be crucial when students select an accounting firm and career path. Every party affected by a decision can be regarded as part of the solution. document.write('<'+'div id="placement_282686_'+plc282686+'">'); In part one of this series, we ended with five key aspects relevant for responsible leadership, namely being able to make informed ethical judgments, displaying moral courage, engaging in long-term thinking, communicating effectively with stakeholders, and participating in collective problem solving.In this second part, we will elaborate in more detail on these aspects. Keeping pace with the rate of digitally-driven change in our rapidly advancing world can be daunting. Both vocations require the demonstration of professional knowledge by new members. responsible when he or she is responsive to the needs, concerns and interest of those whom one aspires to lead. It is not status or a position, but essentially, it’s a function or service. While the accounting profession requires 150 credits of academic work for a CPA license, the substance of those credits is frequently flexible, and an advanced degree is not required. Certain leadership theories taught at the Coast Guard Academy lend themselves to both professions, such as servant leadership. For example, the Coast Guard Academy has 16 academic credits devoted to professional studies topics, along with countless military training sessions and summer programs to prepare students for their professional responsibilities. Furthermore, it is important that educators reinforce the points expressed by Arthur Levitt, that accounting is a noble profession with a significant public interest responsibility. At Providence College, academic integrity policies are typically described in course syllabi. I have read this article The Five Dimensions of Responsible Leadership is very informative. Since the 2008 financial crisis, the global chorus of voices questioning capitalism has grown steadily louder. The person enforces an array of policies, procedures and rules to govern people. Since high school students enter college with an increasingly diverse set of values (William Stephens, Carol A. Vance, and Loyd S. Pettegrew, “Embracing Ethics and Morality: An Analytic Essay for the Accounting Profession,” The CPA Journal, January 2012, http://bit.ly/2lrBLuF), it is vital that accounting educators emphasize the values desired by the profession. Ajagun (2003, 107-116) conceptualizes it as advancement which makes life more meaningful in its various aspects, including the economic, administrative, political, social, cultural and religious. This includes the ability to self-assess one’s performance and consider what is needed for future success. These factors are particularly important as accountants withstand client pressures. Medicine, teaching, law, accounting, the military, the clergy, and public safety, among many others, have all been regarded as honorable professions, and their members strive to maintain high standards, including ethical leadership, professional and technical competence, integrity, conduct that garners public trust, and placing the public interest above self-interest. var div = divs[divs.length-1]; The beginning of the twenty-first century was plagued with extensive, evasive, and disheartening U.S. business and political leadership failures. Leadership by example True leaders lead by example. The “Four Cs”—character, competence, commitment, and community—at the heart of this definition proved very helpful in focusing cadet efforts as developing leaders of character and received a great deal of emphasis throughout the program. The finance function is not what it used to be. Accounting firms also have articulated core values. })(); var AdButler = AdButler || {}; AdButler.ads = AdButler.ads || []; These leaders know where they are from, where they are now and where they are going and they shape the future accordingly. To prepare students to serve as effective group members, various team opportunities are provided during the undergraduate program, including military, athletics, academic, and community service experiences. Leaders in accounting should observe the principle of constitutional and parliamentary oversight. The success or failure of an organization is determined more by the financial leadership within an organization than its strict adherence to accounting rules and regulations. Edited by CPAs for CPAs, it aims to provide accounting and other financial professionals with the information and analysis they need to succeed in today’s business environment. Ethical leaders must consistently make correct moral decisions, even under challenging circumstances. Maintaining an ethical tone at the top is vital for accounting firms because of the positive impact it can have on staff as they carry out their duties and interact with clients. Effective leaders are able to think and act with both short-term and long-term goals in mind. They are also independent thinkers who challenge inefficient practices and question unethical actions. This isn’t the traditional definition of responsible leadership. In addition, some firms have accounting case competitions that promote interactions between students and firm personnel (e.g., the PricewaterhouseCoopers Challenge competition). The accounting profession needs men and women who are competent, productive and effective leaders at all times. And the ultimate role as a leader is to get results and to facilitate effective service delivery. 359 users have voted. The accounting profession has also made significant progress in working with educators to develop the ethical leaders of the future. They must give accountability all the time, and not make the profession a blame-placing game. The Coast Guard Academy builds self-assessment into its leadership program, challenging students to achieve their potential, both professionally and personally. In fact, as a leader, we should. The Coast Guard is also more explicit in preparing its students to be ethical leaders using a structured program. They are courageous, honest, and credible. Diane D. Fuller and Nancy K. Hyde also emphasize the importance of tone at the top, noting that “leaders must model character. Accounting professionals face similar expectations; communication is one of the Personal Core Competencies identified by the AICPA in its Core Competency Framework: Accounting professionals are called upon to communicate financial and non-financial information so that it is understood by individuals with diverse capabilities and interests. Regarding responsible leadership as shared also means that different parties assume leadership roles in the search for common solutions. The aim of this paper is to lead to a better understanding of the place of personal and professional ethics, which is a key element of responsible leadership, in Big Four management. Others advocate for a required accounting ethics course that focuses on the many different aspects of values and ethics in an accounting context (Cindy Blanthorne, Stacy E. Kovar, and Dann G. Fisher, “Accounting Educators’ Opinions about Ethics in the Curriculum: An Extensive View,” Issues in Accounting Education, August 2007, http://bit.ly/2knAL9J). What other profession so directly holds the keys to the public confidence—the lifeblood of our markets? This concept was endorsed by the Pathways Commission on Accounting Higher Education (Charting a National Strategy for the Next Generation of Accountants, July 2012, http://bit.ly/2k45j4w) and has worked very well at Providence College. Despite the accounting profession’s standards of professional ethics, accounting as a profession also was tainted with various ethical leadership indiscretions during this time. EL, 30.11.2018 at 03.49 pm. They must give accountability all the time, and not make the profession a blame-placing game. Leadership and management skills are essential for effective service delivery in all company operations. The well-known leadership guru, John Maxwell, suggests the following qualities for successful leaders: Greatness is not only found in status and positions, but also in goodness, humility and service to others. In 2014, the AICPA founded a National Commission on Diversity and Inclusion to promote efforts to recruit and retain minorities, including developing tools to assist accounting firms in their diversity efforts (AICPA National Commission on Diversity and Inclusion, Feb. 2, 2014, http://bit.ly/2kPhWjj). Since students enter college with a varied set of personal values, it is vital that they develop as ethical leaders … The outcome of responsible leadership includes. We'll … ‘Never Let a Crisis go to Waste’: How Three CEOs Helped their Companies Thrive in a Pandemic. The sessions during a recent semester focused on opportunities at large firms, regional and smaller firms, nonprofit organizations, finance firms, and tax and internal audit positions, along with a session on resume preparation and interviewing techniques. Thus, to become a leader, you take up a specific function. By using the gift of hindsight, we can benefit and grow from our mistakes. In a recent article in The CPA Journal (“From Analysis to Action: The Evolution of Accounting Ethics Education,” August 2016, http://bit.ly/2lpujiy), Stephen Mintz stresses the importance of ethical leadership and accountants’ public interest obligations to promote ethical behavior. var abkw = window.abkw || ''; In addition, PricewaterhouseCoopers’s annual Faculty Symposium provides technical updates and access to firm personnel for discussions on a wide variety of topics. What other profession has that responsibility? Managers and leaders must deliver services and promote excellence and high performance. Your go-to source for weekly updates on accounting and financial news. It also includes maintaining the stamina to work the long hours necessary to accomplish time-critical tasks. If leadership is action then responsible leadership is responsible action. Responsible Leadership A changing world demands a new leadership style emphasising societal impact and commitment to the common good. Leaders of accounting firms set the ethical tone at the top There is a link between organizational culture and leader decision making styles Audit seniors' perceptions of their … If the leaders in accounting are weak and incompetent, service delivery will soon follow suit. Responsible2leadership has a sense of obligation to do something which reflects a certain level of care and concern for others while taking into consideration the impact of decisions on others, both inside and outside of the organization. Together, they establish a pattern of success and help their companies reach key milestones. Daniel Miller. At the executive level, it requires absolute clarity about the depth and breadth of all of the roles implied in the positions. Commitment from firm management is important if diversity programs are to succeed. Some have employed an “ethics-across-the-curriculum” approach, in which ethical topics are addressed in most if not all accounting courses. Responsible leadership also He recommends Gentile’s GVV exercises to help simulate the accounting workplace and encourage ethical conduct. Accountability builds trust. Good stewardship For accountants, Nicholas Mastracchio, Carlos Jiminez-Angueira, and Ildiko Toth point out that certain states, including California, Texas, and Illinois, now require an ethics course for new CPA applicants (“The State of Ethics in Business and the Accounting Profession,” The CPA Journal, March 2015, http://bit.ly/2kPpjXZ). Accounting students can also engage in peer evaluation of team performance in their accounting courses, which provides valuable feedback on their teamwork abilities. They must apply the principles and values of the Administrative Justice Act and always respect the community values and respond to community needs well. Many accounting faculty introduce these ethical principles in the classroom. A cooperative effort between accounting educators and practitioners can facilitate this process and benefit students. Team ManageMagazine-November 30, 2020. As identified by Robert Greenleaf, this is a theory in which serving others is a priority of those in leadership positions (Servant Leadership: A Journey into the Nature of Legitimate Power and Greatness, Paulist Press, 1977). var div = divs[divs.length-1]; var plc461033 = window.plc461033 || 0; This author recommends four measures that could help: an “Introduction to the Profession” course, expanded connections with accounting professionals and students, increased faculty and professional communication and cooperation, and development of an ethics curriculum and strategies for student success after graduation. When applied to trust, over time the employee attempts to establish if the lea… 29Sep. Leadership also refers to the tone a company's management sets in terms of the corporate culture. The principles of leadership and administration: Leaders in accounting should observe the principle of constitutional and parliamentary oversight. Although the Coast Guard has a more structured program for developing leaders of character, the accounting profession and educators can learn from some of its approaches. In turn, their teams demonstrate similar behaviours, following the culture established by the leader. })(); The CPA Journal is a publication of the New York State Society of CPAs, and is internationally recognized as an outstanding, technical-refereed publication for accounting practitioners, educators, and other financial professionals all over the globe. The structured nature of the core accounting curriculum requires a great amount of student focus on task completion and independent thinking. Patrick Kelly, PhD is an associate professor in the Department of Accountancy at the Providence College School of Business, Providence, R.I. © 2019 The New York State Society of CPAs. document.write('<'+'div id="placement_459481_'+plc459481+'">'); As leaders in the accounting profession, facilitate transformation and build strong relations with the people you work with – it is important to love them and create a positive and joyful environment where they can excel. (function(){ For example, auditors need to be able to effectively and persuasively communicate the results of their audits to others in leadership positions. There are also frequent visits from senior officers, including the Coast Guard Commandant. There are many instances where accounting professionals must demonstrate communication skills. Passing proficiency exams such as the CPA exam or navigational “Rules of the Road” exams is necessary but not sufficient for future professional success. var plc461032 = window.plc461032 || 0; Both the Coast Guard and the accounting profession attract talented people who want to be successful. The Social Connection Model The one thing that underpins the success of this new model of responsible business leadership is what researchers call the ‘social connection model’ of responsibility. As the famous proverb says, “If you are leading and find out that no one is following you, know that you are not leading but just taking a walk”. In terms of developing future leaders of character, the following definition of leadership was used in the Coast Guard Academy Leadership and Character Development Program: Leadership is the practice of good character, competence, commitment, and community through example, decisions, and actions that engage others to achieve shared objectives and aspirations (“Developing Leaders at the Coast Guard Academy: The Cadet Leadership and Character Development Program,” Patrick Kelly, Bulletin, June 1997). (function(){ The operating results reflect my leadership decisions, including some key factors below: I made the decision to release [Novel A] in the last month of the fiscal year. There are many other occasions for accounting professionals to connect with students, both on and off campus. What place do audit firms, and more specifically the Big Four, attribute to For example, Miriam Gerstein notes that accounting firms need ethical leadership to properly implement their ethical values and a code of conduct (“Determining Whether an Accounting Firm is Ethical,” The CPA Journal, June 2014, http://bit.ly/2llpjjb). They engage today’s talents and know how to manage such a talent. Ethics topics are addressed as part of the liberal arts core curriculum in the Development of Western Civilization four-course sequence, and students also complete a required ethics course. As a result, we had all the revenue in our last fiscal year and all the returns in this fiscal year. Accounting students also have opportunities for self-assessment through campus career center programs and activities, internship programs, and classroom experiences. The Coast Guard Academy maintains a military training staff and a professional development staff comprising Coast Guard officers. For example the Financial Times defines responsible leadership as: "making decisions that, next to the interests of shareholders, also takes into account all the other stakeholders, such as workers, clients, suppliers, the environment, the community and future … There is a specific focus on preparing cadets for the required professional exams and future leadership challenges. var plc459481 = window.plc459481 || 0; Leadership must be exercised in order to get things done. This approach works best in environments where safety is paramount, such as an oil drilling rig. The accounting profession has also made efforts to integrate women and minorities, with a recent emphasis on increasing diversity at many firms. Students also write two papers about what they have learned during these sessions. As leaders we must lead our people well and not assault them. 984 users have voted. In fact, it has changed considerably over the past five to ten years. KEY WORDS: responsible leadership, leadership, stake-holder theory, leadership roles, relational intelligence Leading in a global and interconnected world Today’s leaders act in a global, complex, uncertain and interconnected business environment. For example, Deloitte’s values are integrity, outstanding value to markets and clients, commitment to each other, and strength from cultural diversity (“The Power of Shared Values,” http://bit.ly/2k4AuYl), while KPMG’s values direct employees to act with integrity, lead by example, and respect others (“Our Values,” http://bit.ly/2knnkHb). With today’s emphasis on leadership, there is frequently not enough focus on the concept of follow-ership. Increased oversight and accountability, along with client pressures, provide additional leadership and organizational challenges not experienced by prior generations of accountants. 1. They also note that most states do have ethics continuing education requirements; for example, New York’s mandatory ethics requirement is four hours of professional ethics every three years. The principles articulated in the AICPA Code of Professional Conduct include integrity, due care, objectivity, and independence, and the IMA Statement of Ethical Professional Practice focuses on competence, confidentiality, integrity, and credibility. During the time the author directed the Coast Guard Academy’s Cadet Leadership and Character Development Program, a “Leadership Across the Curriculum” effort addressed leadership and ethical development in the academic, military, and physical fitness programs, with the goal of developing “leaders of character.” Specific leadership outcomes were developed that included directing and developing others, making professional decisions and ethical judgments, functioning as a successful team member, communicating effectively, and demonstrating respect for others. The vital role of the accounting profession in serving the public interest has, however, continued to be well recognized. In terms of competency of Management Accountants, 76.5% organizations’ respondents are of the From this perspective, stewardship is an expression of responsible leadership. Leadership. The leaders must uphold the values and principles of good governance. 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