School of Business Administration, Portland State University

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The Center of Professional Integrity & Accountability

(The Portland State Project)

Purpose

The purpose of the Center for Professional Integrity and Accountability is to articulate and accentuate organizational management and the accounting profession’s responsibility for acting in the public interest.

Objective

The objective of the Center is to encourage and sustain inclusive, enlightened, and ongoing discourse concerning what constitutes organizational management and the accounting profession’s responsibility for acting in the public interest.

Core Values and Assumptions
  • Acting in the public interest requires consideration of natural, social, and economic systems.
  • Natural systems provide the context and sustenance for social systems and, therefore, must be respected, nurtured, and sustained.
  • Social systems provide the context and objectives of economic systems.
  • Organizational management and the accounting profession have a central role in the long-term viability of a democratically governed society grounded in justice, equality, and trust and supported by a sustainable economic system.
    • While all members of society have a moral responsibility to act in the public interest, organizational management is specifically granted fiduciary responsibility over society’s economic resources, which consist of natural, human, financial, and technological resources.
    • The accounting profession facilitates and monitors organizational management in carrying out their fiduciary responsibility. Thus, the profession is concerned with the integrity and accountability of financial and administrative systems and those who design, implement, and utilize them.
    • The accounting profession must maintain high standards of integrity, responsibility, and accountability in order to fulfill its charge.
  • The academic accounting community has a responsibility to facilitate, and engage in, dialogue among stakeholders regarding accounting’s (the profession, the professionals, the systems) and organizational management’s public interest responsibilities.
  • The accounting profession, the business community, members of the academy, and representatives of the Metro/Regional community have a responsibility to engage in and sustain the discourse.
Action

Consistent with the core values, the Center’s objective is pursued through scholarly investigation, educational innovation, and community interaction.

Scholarly Investigation:

A primary focus of the Center is to bring together the expertise of faculty, students, and the community to identify and consider the critical public interest issues facing accounting and organizational management. For example, the Center supports scholarly investigation of accounting, the accounting profession, accounting professionals, and accounting systems within their economic, political, social, ecological, and organizational context. The advantages in exploring a wide range of research topics, methods, and styles are recognized.

Educational Innovation:

Educational innovations should provide students and faculty with the appropriate tools for constructively addressing critical public interest issues facing accounting and organizational management. Appropriate means include both an appreciation for the historical and current role of organizational management, accounting, and the accounting profession as well as an ability to envision opportunities for socially responsible, and responsive, development, especially in the areas of integrity and accountability. The Center supports educational innovation in various forms including pedagogy, program development, curricular development, course development, development of course materials such as publishable case studies, and educational research.

Community Interaction:

The Center serves as a focal point for inclusive, enlightened, and sustained discourse in the Metro/Regional community. Generally, the discourse should explore the accounting profession and organizational management’s public interest role consistent with the core values. Specifically, the discourse should envision opportunities for socially responsible, and responsive, action, especially in the areas of professional integrity, responsibility, and accountability.

Accounting Professionals’ Public Interest Responsibilities

In light of the dramatic and continuing failures of integrity and accountability within the economic sector, society is seriously questioning organizational management’s motives and the accounting profession’s ability to safeguard the public interest. The Sarbanes-Oxley Act, NYSE Corporate Governance Rules, and the follow-on legislation and regulations, begin to codify society’s expectations but cannot serve as a substitute for professional commitment to uphold the public interest.

  • Accounting professionals employed as external auditors have a clear responsibility to the public and their audit clients for providing relevant, reliable, and transparent information to external and internal stakeholders.
  • While less clearly delineated, accounting professionals employed in other
    capacities also have a responsibility to serve the public interest. Consider the following:
    • The accounting function prepares communications used by creditors, owners, sponsors, contributors, employees, unions, managers, politicians, regulators and society. These stakeholders have a right to expect objective, independent, honest reporting.
    • Internal auditors and managerial accountants protect the reputation of their organizations, partially by recognizing and addressing organizational risks—whether legal, financial, social, environmental, etc.—resulting from activities of the organization. As collectors and conveyors of organizational information, accountants have a unique opportunity, and responsibility, to identify and communicate activities and behaviors that jeopardize or enhance the organization’s ability to carry out its responsibilities.
    • Accountants must use their controllership roles to ensure that the organization does not violate its implicit license to operate. This license is clearly broader than a legal privilege granted by a corporate charter with the recent scandals showing that corporate misconduct can have profound financial and social implications. Processes designed to safeguard the public interest did not adequately address the integrity and accountability of the financial and administrative systems and those who designed, implemented, and utilized them, leading to questions regarding the foundational purpose of accounting as a profession.
  • Accountants must be aware that they are part of both natural and social systems. Any accounting system not cognizant of both cannot adequately incorporate the risks, opportunities, and responsibilities faced by individuals, organizations, and society.

Research Opportunities:

Key research concerns within financial accounting include non-GAAP disclosures (e.g., social or environmental) and the effects of reporting practices on market fluctuations. In managerial accounting, important research topics include the interplay between autonomy and internal control devices, the impact of corporate governance issues, the evaluation of environmental risk, and the roles of budgeting and accountability in a transparent business environment. In auditing, questions of corporate governance, the effects of the Sarbanes-Oxley legislation, and providing assurance for a variety of stakeholders are legitimate research pursuits. Noteworthy research issues in the accounting information systems area include the social consequences of information access, relating creativity and business knowledge to system characteristics, and the interrelationship between system capabilities and the moral implications of accounting technologies.

Educational Opportunities:

Questions concerning the accounting profession inevitably require a related critique of the role of academic accounting programs. Through the design of curricula and choice of research topics, most programs have inadequately addressed the need for students and faculty to understand the depth and complexities of the profession, especially as they relate to professional integrity, responsibility, and accountability. The curricula opt instead for a broad range of technical material, geared to knowledge of rules and conventions of practice, often directed to passing professional exams. However, the public expects universities to transcend the production of accounting technicians by exploring the societal role of accounting. This approach joins technical competence with a deep understanding of the complex responsibilities of accounting to organizations, society, and the environment.

Salient curricular issues include the responsibilities of the profession, the philosophical grounding of accounting, and the ethical and social dilemmas graduates face in the profession. The development of the profession, its relationship to the public—past, present, and future—and its role in society should be an integral part of accounting education at all levels. Innovative programs should provide students with an understanding of: the situated roles of the profession; their own responsibilities as accounting professionals; the responsibilities of organizational management as well as other stakeholders; and the interrelationship between social and natural systems.

Community Opportunities:

Community interaction should include such activities as providing “experts” to the press, hosting accounting related business forums such as the SBA Business Briefings, facilitating continuing education and executive education, and most importantly enabling an ongoing dialogue among the relevant stakeholder groups such as students, faculty, the accounting profession, organizational management, and the local community.

Center Funding

The center will actively solicit resources to support its work from private and public donors, corporate and government sponsors, research contracts, and income generating activities such as workshops and other educational endeavors. To the extent feasible, the work of the Center will be supported from such sources.

Contact

For more information, contact Jesse Dillard, Director, by phone at 503-725-2278 or by email at jdillard@pdx.edu.

© 2007-8 Portland State University SBA

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