Newsletter from
Steve Richardson & Company, Certified Public Accountants
December 18, 2019
The Growing Hunger for Authenticity
To Our Clients and Friends:
Truth, accuracy and accountability
A Pew Research report issued in 2019 included an article headlined as, “Americans’ struggle with truth, accuracy and accountability.”
It’s no surprise. We live in an age of “fake news”, it seems that all of the news media have become editorial-opinion platforms instead of sources for legitimate news. The few legitimate news sources are drowned out; their voices muted. Most Americans admit they at times have trouble distinguishing the truth from falsehood from certain sources.” [Lee Rainie, Scott Keeter, and Andrew Perrin, Pew Research Center,
Trust and Distrust in America (July 2019), 46, available at https://www.people-press.org/2019/07/22/americans-struggles-with-truth-accuracy-and-accountability/.]
We are now at a point where most Americans do not trust their own news media. It does seem that most news media is in the business of entertainment and ratings, and no longer overly concerned with reporting legitimate news.
Once, the most trusted profession in America was the local pharmacist. That is certainly no longer true – for good reasons.
Do CPAs hold the high-ground?
I have always held out hope that my profession as a CPA still held the high ground of trust in America and, for good reasons, that is no longer true either. Here are the top 10 accounting frauds of the 21st century:
- Enron
- HealthSouth
- Tyco
- WorldCom
- Waste Management
- Freddie Mac
- American Insurance Group (AIG)
- Lehman Brothers
- Satyam
- And, let’s never forget Bernie Madoff
Each of these frauds involved CPAs who willfully misrepresented the truth. That’s polite language for “They Lied!” CPAs cannot lie and be legitimate.
In simplest terms CPAs are paid professional tellers of the truth. We are required to support our opinion of the truth with high-quality work, backed-up by our professional standards and Code of Conduct. The professional standards and Code of Conduct are very important, but, if the CPA is not hard-wired to tell the truth, these important documents become meaningless.
Our first job, as CPAs, our highest client responsibility, is to tell the truth.
Does the “truth” really matter?
Yes, it matters a great deal.
The single most powerful reason that poverty persists in much of the world is corruption. In many countries, graft is a pervasive part of the culture. It permeates every level of third world society: government, police, military, business, banking and even in the local operations of the charitable organizations that many of us support. Bribery is seen as a necessary cost of doing business.
Billions of dollars of foreign aid and other funding seems to disappear into the Swiss bank accounts of a few high level leaders.
It is a simple economic rule: corruption breeds poverty. We need to stop the erosion of the basic ethical underpinning of our culture.
I, unfortunately, have no idea how I or we can work to overcome the crisis in “truth, accuracy and accountability”; that is way beyond my skill level.
What can we do?
In business and in our professional lives we can work to make positive changes.
- Business and professional leaders, year-in year-out, must focus on maintaining integrity standards as the key to building trust, and rightly so. High moral, financial, and other standards are a must – in any business organization, integrity comes from the top.
- Integrity must be integral in all tax and financial matters. We must be held accountable. In business maintaining appropriate transparency is a basic building block to healthy business activities. In the non-profit industry, independent board oversight is essential.
Blind trust in our leadership is not healthy. The Russian proverb comes to mind, “Trust but verify.” Authentic leadership is built on integrity.
Authentic is defined as “genuine or real.” Authenticity, the state of being authentic, is being “true to oneself or to the person identified.” Furthermore, when something is authentic, it is “entitled to acceptance or belief because of agreement with known facts or experience; reliable; trustworthy.” The opposite of authentic is false. Look up the definition.
[https://www.dictionary.com/browse/authentic?s=t.]
When leaders live authentically, it spreads throughout the organization and becomes part of the culture and DNA. On the other hand, when leadership lacks authenticity, it corrupts the organization, and it’s just a matter of time before public perception will catch up.
Practice humility. Ok; I admit that this is a hard principal for me. I’ve had to learn humility the hard way and my lack thereof occasionally rears its ugly head. Fortunately, I married a woman whose mission in life seem to be keeping Steve humble. Also, I have a remarkable staff. Amy and Todd, as are the rest of my staff, are people of high integrity. If I make a mistake, my staff has no problems with disagreeing with me. In fact, they will vigorously disagree with me if they feel it is important.
I have great respect for my staff; they keep me humble – sort of. Mostly.
The first proof of functional humility is a willingness to admit limitations and mistakes. To tell the truth – especially when it hurts. To say, I made a mistake; here is what we can do to make it right.
Andrew Murray, Humility (Radford, VA: Wilder, 2008), 23. Dan Busby and John Pearson two people I respect, issue these major warning signals of troubled leadership: lack of humility and pompous self-interest over the common good. See Busby and Pearson, “More Lessons from the Boardroom”, 23.
“The public face of perfection always hides a troubled soul.”
My solution.
I can’t change culture or even make significant changes in my own profession. The only thing I can do is to practice honesty in my business and personal life. It doesn’t sound like much; frankly, it’s not much. If that is all I can do, then, it is enough.
- Speak openly and honestly
- Avoid the “spin”
- Tell the whole truth not the “selective” version
- Work hard to do a thorough professional job
Admit when you cannot do a good job due to a lack of competency on a project, a lack of time or staff or whatever. Do not take on a task that you know will not be well done.
Authenticity is the latest buzzword of our Millennial Generation. I like that! The Millennials care about authenticity, honesty, accuracy and accountability.
I believe in our Millennial Generation. They are beginning to bring us back to a place where authenticity is required before trust is given. I find that appropriate.
CPAs
Obviously, from the tone of this letter, you can tell I’m worried about our profession. I’m going to do my very best to be a good example of what a CPA should be.
In audits, reviews, tax work or any other professional work, we will do our best to be honest while we work to the highest standards of our profession.
That will have to be enough.
Sincerely,
Steve Richardson, CPA