Accountants face ethical challenges

AN UNSTABLE and unconventional business environment in Zimbabwe has created ethical dilemmas for local accountants, an Association of Chartered Certified Accountants (ACCA) breakfast meeting heard last week.
This comes as a persistent economic crisis has forced unorthodox systems of commerce on the southern African nation.
The country adopted a multi-currency system in 2009 after hyperinflation rendered the Zimbabwe dollar useless. Now, multiple dysfunctions in the world’s only such cash system have created a plethora of perplexities for business.
“With the changes in the currency system following the introduction of the FCAs (foreign currency accounts), accountants are going to be faced with the challenges of how to prepare statements that will make sense…there is pressure on the profession to report figures that make sense without affecting the overall figures for the foreign parent which would want to consolidate the figures,” said one of the participants at the roundtable meeting, held to mark the Global Ethics Day.
The central bank recently directed all banks to effectively operationalise the ring-fencing policy on nostro foreign currency accounts it introduced in February by separating FCAs into two categories ― nostro FCAs and RTGS FCAs. The move is meant to deal with the dysfunctions of the experimental currency regime, chief of which has been shortages of cash, which have reportedly seen some businesses participate in the informal currency exchange market.
“With the current foreign currency shortages that are obtaining locally, businesses have had to look for it on the parallel market…you ask yourself, how ethical is it for a formal business to participate in the black market, but if they don’t do that they face collapse,” said another participant.
“And even if it is acceptable for business to source funds from the streets, those markets are not organised in any way, there are no receipts and you cannot trace transactions. That kind of thing is a nightmare for accounting and auditing, but more importantly, ethics are also called to question,” she added.
It also emerged that new financial technology has not made navigating the environment any easier.
“Locally, with the emergence of mobile money, tracking transactions is not easy…other new age technologies such as cloud computing and blockchain have also created ethical issues. It is not simple to define what is ethical and what is not anymore” said another participant.
In the face of the cash shortages, Zimbabwe has witnessed phenomenal growth in the use of plastic money. The apex bank says in 2017, more than 96 percent of the $97,5 billion ― from the $1 billion transactions ― processed during that year were through electronic and mobile banking systems.
Mildred Chiri, the Auditor-General, said some of the ethical dilemmas are remnants from the hyperinflation era.
“I think ethics are topical here in Zimbabwe in particular because of where we are coming from, the hyperinflation period. I think some of the behaviours which we adopted during that period are still with some of us and they have infiltrated business.
“I think we need to continue this dialogue so that ethics are instilled in us…the framework is also important because if there are parameters, if you know that there is a mirror, you will be discouraged from misbehaving,” she said.
Global Ethics Day was observed on October 17. It was the fifth annual event organised by the Carnegie Council to encourage organisations to explore the role of ethics in a globalised world, including ethics in business.
Last year, 60 organisations and individuals from 31 countries participated in a range of events that included lectures, workshops and c