Summary of the Article
In the article, a Working Group established by the International Ethics Standards Board for Accountants (IESBA) and the national standards from China, the U. S., THE United Kingdom, South Africa, Australia, and Canada analyzes the impact of Covid-19 pandemic on accounting. Specifically, the authors seek to identify the ethical issues and challenges likely to emerge after the end of the pandemic and throughout the recovery period. The chief argument developed in the article is that the recovery period will have new ethical challenges affecting accountants. Therefore, the authors demonstrate the need for renewed efforts to uphold ethics in accounting and auditing.
This article identifies five major challenges in accounting ethics that are expected to intensify during the recovery period. First, the author states that uneven economic recovery will be a normal phenomenon due to differences in industries, sectors, and jurisdictions. Second, there will be new demands for support and efficiency, requiring professional auditors to consider issues related to familiarity and independence carefully (IFAC, 2021). Third, it is expected that there will be a rapid digitalization in the industry, which will also pose new threats such as cybercrimes (IFAC, 2021). In addition, professionals will face such challenges as burnout and mental health issues due to increased workload during the period. Finally, the author notes that the recovery period will be highly dynamic and bring about a new focus in accounting. Still, there will also be an issue of the predisposition to focus on the past.
Relationship of the Article with Business Leadership Issues and the COVID-19 Pandemic
The article is relevant to various aspects of business leadership issues, especially during the pandemic and after it. In particular, the main theme is ethics and the changes that will affect it during and after the COVID-19 pandemic. The authors predict the challenges that will affect professionals in accounting, especially in auditing, as a result of new dynamics and pressures resulting from the pandemic (IFAC, 2021). For instance, new ethical challenges will emerge in accounting, such as the use of nontraditional audit procedures with no regard to fundamental principles of accounting. Moreover, the pandemic forced professionals to work remotely, mainly from home, which greatly depended on digital technology. Consequently, new ethical challenges such as using new methods, cybercrimes, self-monitoring, and independence emerged. There are some new challenges in business leadership, such as developing new and advanced codes of ethics in accounting and auditing and ensuring that they are implemented at all times during the recovery period.
Personal Reaction
From a personal point of view, the IESBA Working Group’s report is accurate and correct and reflects the actual environment in the global business sector. The new challenges emerging from the COVID-19 restrictions and rules have affected business in various ways. As more auditors and accountants resolve to work remotely, additional challenges and ethical issues emerge. Accountants and auditors in different fields must ensure that they develop and follow strict rules and codes of ethics in the new era. Moreover, this analysis provides evidence that the pandemic will have significant long-term impacts on business and business leadership. As seen in the case of accounting, the increased application of technology in conducting business and working remotely means that there will be new challenges for business leaders. Indeed, one of these challenges involves the issue of ethics in business. In this case, business leaders must identify the possible risks associated with the new working environment and methods and ensure that they understand their potential impacts. In addition, business leaders must have new strategies to cope with such challenges or mitigate the risks associated with the unique ethical issues during and after the pandemic.
Reference
IFAC. (2021). 5 ethics challenges that will intensify as the pandemic wanes.