Gabriela Figueiredo Dias, chair of the International Ethics Standards Board for Accountants (IESBA) and co-CEO of the International Foundation for Ethics and Audit (IFEA), the organization that houses IESBA and the International Auditing and Assurance Standards Board (IAASB), is tasked with ensuring that IESBA initiatives have a public-interest focus as well as developing global ethics and independence standards.
Led by Dias and IESBA’s Technology Working Group, the IESBA has worked to provide guidance on ethics in an era of rapid technological advancement. For example, in March 2022, it published “Exploring the IESBA Code, A Focus on Technology: Artificial Intelligence,” which examined the application of the International Code of Ethics for Professional Accountants’ conceptual framework to address ethics and independence issues arising from the use of AI. Also in 2022, the board released the IESBA Technology Working Group Phase 2 Report, which charted the evolution of the technology landscape and outlined trends, opportunities, impact, and risks of robotic process automation; AI; blockchain, cryptocurrencies, tokens, and decentralized finance; and cloud computing, among other technologies.
In April 2023, the IESBA approved technology-related revisions to its Code of Ethics to “guide the ethical mindset and behavior of professional accountants in both business and public practice as they take advantage of the opportunities created by technology and adapt to new technology [and] remain relevant and applicable in the ever-evolving landscape of technology transformation.”
“We’re quite attentive to what technology means for accountants, and we’re following technological developments very closely, because we’re aware that they aren’t neutral with respect to accountancy and the product that the profession provides, which is corporate information,” Dias says. “There are many impacts in two different areas or sectors—on the one hand, technology impacts the work of auditors of the companies that corporate reporting [specialists] and assurance accountants are responsible for, but it also directly impacts the activity of accountants in business.”
AI COMPLICATES ACCOUNTING ETHICS
The data-gathering and content-creation capabilities of AI are already making impacts on, and driving significant changes to, the accountancy profession as well as many other industries and professions. The IESBA works to identify ethics questions and concerns raised by these technological developments.
“Whatever the latest technological developments may be, there are many ethical issues, because you have machines, so to speak, working on behalf of human beings, but [AI and machine-learning algorithms] don’t have a critical mindset, and [their outputs] aren’t based on values,” Dias says. “They don’t have [the capacity for] critical thinking, they don’t apply any kind of [professional] skepticism, and they aren’t the best at protecting data from being biased—on the contrary.
“The ethical problems arise from applying technology developments to accountancy, and if you don’t have clear guidance and standards with respect to the ways the professionals use technology, you will end up in a situation where you have issues or an empty space with respect to the values that this activity must be subject to,” she says.
As an example, Dias cites the dramatic growth of accountants using generative AI applications such as OpenAI’s ChatGPT. She says that there’s a widespread concern that usage of AI chatbots may drive the accountancy profession’s activities in a negative direction in that the approach of some may lack a critical mindset or ethical lens.
Yet Dias also acknowledges that there are potential advantages to accountants using new technology, including generative AI. Her approach to these technological developments as IESBA’s leader and spokesperson is to take a practical and balanced stance.
“We can’t say we shouldn’t use [new technologies], prohibit them, or refuse to acknowledge that they’re there—this isn’t possible,” Dias says. “This isn’t something that the profession or even regulators can do, because technology developments are like Mondays or taxes—you may not like them, but you can’t do much against them, so you just have to make the best of them.”
Making the best of these technological developments and impacts means making sure to take advantage of all the good things that they may bring to the profession ethically, Dias says. For instance, AI allows professional accountants to gather and share information from different sources in a much faster way, which they weren’t able to get access to or manage previously, so it enables them to use more data more efficiently than they could do without AI. That said, it also challenges accounting professionals to apply an enhanced critical mindset and competence, which are ethics principles from the IESBA Code.
“Accountants have to be even more rigorous with respect to understanding AI, selecting the information, and using only what is indeed reliable, robust, and appropriate for a specific activity or task,” Dias says. “So the user is trying to capture the reality of AI use cases and determine which are the most relevant impacts that this technology has on their responsibilities.
“Developments in technology are raising ethical issues and questions with respect to the accountancy profession, and we’ve been addressing them against the principles that the Code of Ethics already includes: competence, objectivity, integrity, professional due care, etc., and using the conceptual framework of applying a critical mindset and skepticism, avoiding bias, and evaluating threats in ways that are probably completely different from what many of these professionals are used to, but that will be inevitable and absolutely necessary in the near future and, in fact, are already extremely relevant,” she says.
ETHICAL PRINCIPLES STILL APPLY
The ethics problems that accounting and finance professionals have been grappling with in classical approaches to accountancy are often exacerbated when technology is added to the equation. Regardless, universal ethical principles and standards still apply.
“Because everything goes faster and moves in different ways, an additional effort has to be made by professionals to make sure that they understand this reality, which brings very important and relevant challenge for ethics education and addressing the ethical challenges in an appropriate way,” Dias says.
These technological developments also highlight the need for the use of technology experts to educate staff, she says. It’s incumbent on accounting professionals to take advantage of continuing professional education to learn about new technologies to be able to connect the dots to their ethical implications.
“Because of the complexity of the technologies and ethical matters that accountants have to deal with, more will be forced to tap into the expertise of people who may or may not be fellow accountants but who bring the necessary specific technical knowledge about technological methods and innovations so that they can better understand the questions, the information, etc.,” Dias says. “This raises additional ethics problems related to conflicts of interest, independence, bias, and again the need for professional accountants to apply a critical mindset and all their competence in using the work of these technology experts to address the ethical problems that they may raise.”