Accountants above tax

Ernest Ovegen

On July 14, 2023, it was widely reported in the press that hundreds of employees at KPMG had cheated on their answers to exam questions. I quote from the report of accountant.nl: “In the last five years, the study shows that more than a hundred employees per year have been involved in sharing answers to mandatory training courses with each other. Many of the employees who are still at work have now given permission. Many colleagues will say goodbye in consideration of their involvement and position.”

As the well-known saying goes, he who burns the ass must sit on the blisters.
In other words: you bear the consequences of your actions. That punishment following misconduct is logical and sensible.
In 2019, KPMG America was fined for a similar fraud. KPMG Australia was fined in 2021 for sharing responses internally over several years. In the spring of 2022, PwC Canada was fined. In mid-2022, EY America was fined for the same facts.

Take it from me that all these organizations spoke the right words in response to those events. And they would have used the necessary sanctions. They would have taken more action. Unquestionably honest. And undoubtedly worthless. Because before the fraud takes place, it is already clear that this is unacceptable. No need for new regulations. The existing rules are already clear.

‘Having worked at KPMG, I too would have felt the urge to cheat.’

I read that everyone was oohing and aahing about the accountant. I get it. They are the ones who check the wrongdoings in the institutions. Those who have taken an oath to act with due care and integrity. But dear reader: working at KPMG I would have been tempted to cheat. Now don’t think bad people work at KPMG. By that you count yourself very rich.

Cheat Edge

I am honest. At least, I think so. But I also use cheat edge. If you consider us as human beings, at one end of the continuum, you can say that a few percent, say five percent, are crooks. On the other side of the continuum are the sinless saints. Some say one percent, others say zero percent.

For everyone else, they want to be honest. They feel the same way. And… they use a cheat edge. I mean, they do things that aren’t right (a little, not too violent), but justify it off the table or define it. The tool we use for this is called ‘self-justification’. The smarter people are, the more efficient they are.

And it’s mostly an unconscious process. People insist on being honest at all times. and argue skillfully or define their function on the edge of cheating from the table. Much of that activity is introduced by ‘yes, but’ or ‘actually’. AndWhat I did was definitely not right. But still Others do it even more frantically! In fact I should have said sure, but…

Fraud triangle

All accountants know the fraud triangle. Rationality, pressure, opportunity. If you, as an accountant, have the opportunity to send answers and receive those answers, there is an opportunity. If you have a lot of work and are dying in all your work, there is also pressure. If you find the content of the exams boring, or if it is more relevant, easily found on the intranet, or you think you already know everything, then you have a rationale.

Then fraud is soon born. Plus, if everyone is doing it, and/or your manager is participating, or everyone knows about it and no one is doing anything (not even the quality controller), you’ll soon fall to the axe. Again: I will go to the ax myself.

Learn the lessons

KPMG wants to learn from this. It makes me feel better. I didn’t expect that either. Stephanie Hottenhuis, CEO and President of the KPMG Group in the Netherlands: “We are very shocked by the very important findings of the forensic part of the investigation. (…) We are now working decisively to investigate the causes, learn from this and further improve and strengthen the system for the future.” KPMG America’s answer in 2019? “WI learned important lessons through this experience.“Of course companies want to learn from this.

‘Knowledge of what is permitted and what is not is not an issue.’

But vision papers, beautiful stanzas about the values ​​accountants uphold, integrity and due diligence and ethical awareness and so on have all been written long ago. Knowledge of what is and what is not allowed is not a problem. Shouting out loud: It shouldn’t be allowed, accountants should be honest, accountants are tight-lipped, and other rational facts won’t solve this problem either. Because we already knew yesterday and last year.

Accountants are like me. Integer in thoughts. At the same time, they use a cheating edge. After all, like me, they are good at justifying this deception. Smart people are always very good at it. I don’t need texts, laws or checklists to heal from this. It won’t work.

What works?

It can be summed up in one word: Awareness. at different levels.

1. Be aware of the fact that you are also using cheat margin. Awareness of this helps reduce that edge. It also makes it possible to create a safety valve for yourself. This is how you break your self-righteousness. deal with So your own ‘yes but’ and your ‘really’. What is wrong is wrong. Not at all wrong.
2. Learn about team dynamic processes. Peer pressure is hard to resist. A culture in a team is more powerful than any strategy. Culture eats for lunch strategy, mostly attributed to Peter Drucker. So work on these processes.
3. Explore the company culture. Why do good and honest people in your organization do bad things? What makes good people ignore signals? If you only bake the bad apples you will make the problem invisible. By doing so you turn a blind eye to the rotting process (or at least the rotting process) that causes the apples to rot. You will leave out the most important thing you can learn. In fact: you can wait for the next failure. So explore the apple basket.

Please don’t let this be another forced act from outside.