Three Letters; One Word

A common job interview question these days asks candidates to describe themselves using one word.

Let’s apply that to the accounting industry. If you had to associate a CPA with one word, what would that word be?

I would choose integrity.

Ethical integrity is the most important value possessed by a licensed CPA.  It is not simply an ancillary attribute, but the essential element of a CPA’s effectiveness, and the principle underlying his or her importance in the business world.

While all occupations benefit from ethical practitioners, the accounting profession is unique in requiring ethical standards of its members because its very nature is to facilitate accurate communication of financial information between parties. If a CPA’s integrity is compromised, the accuracy of the transmitted information is compromised as a result, with potentially disastrous consequences.

Think a dishonest controller cooking the books and communicating the false information to his CEO – or worse, the company’s investors.

Think an auditor that is careless – or worse, intentionally negligent.

Think Enron, WorldCom, and Phar-Mor. (Actually, better to forget about those…)

The companies employing any of these accountants are not likely to emerge from dangerous situations unscathed.

Integrity is not only an essential quality in a CPA, it is the bulwark of society. The great eighteenth-century British philosopher John Locke stated: “The reason why men enter into society is the preservation of their property.” Societal interaction between strangers is a direct outcome of their financial requirements. Since monetary transactions depend on honesty and integrity to function effectively, it follows that through his integrity, a CPA ensures the success of society as a whole.

All in a day’s work. (And most CPAs will attest to it being a really long day).

This is all technically true of any accountant, but the CPA is the gold standard of this quality of integrity. In every interaction, it communicates the ability to honestly and effectively prepare or audit financial information. An accountant who has passed his or her CPA exam has exhibited a deep and comprehensive understanding of business law and regulations governing the ethical practice of accounting across all public sectors. In effect, the CPA designation is a badge on the lapel proclaiming trustworthiness.

But it doesn’t stop there. The “integrity” description encompasses other important facets of a CPA.

Merriam-Webster’s second definition of the word “integrity” is “the quality or state of being complete or undivided.” As a CPA, an accountant ensures the completeness of the financial information that is recorded and presented by an entity.

The Financial Accounting Standards Board defines the completeness of financial information reported by accounting professionals as a necessary qualitative characteristic: “To be useful, financial information not only must represent relevant phenomena, but it also must faithfully represent the phenomena that it purports to represent. To be a perfectly faithful representation, a depiction would have three characteristics. It would be complete, neutral, and free from error.” (SFAC No. 8, Ch. 3, QC12).

And don’t forget – the strongest qualities of a successful CPA revolve around attention to detail, and excellent organizational and communication skills. Making sure the t’s are crossed and the i’s are dotted – producing a professional and complete work product.

Integrity: It is the number one reason the CPA credential is highly prized by members of the business community. Senator Alan Simson may have put it best: “If you have integrity, nothing else matters. If you don’t have integrity, nothing else matters”. Ethical integrity and the ability to ensure the quality of financial information is the highest priority of the licensed accountant – and the driver of the client’s success.