The Model of Trust Enhancement
The Model of Trust Enhancement contains four critical elements that must be implemented in tandem for the model to be effective. These models are benevolence, ability, honesty, and professional judgment. Detailed research on each of the four elements and their literature is given below.
Ability
One of the characteristics of trustworthiness is capacity. In this case, skill denotes expertise. An accountant of a company must be professional in his or her duties. Core competency has been designated and is now used to assess accountants' abilities to complete their assignments. These abilities are further subdivided into three main categories based on their features. These categories are Personal Competencies, Broad Business Perspective Competencies, and Functional Competencies.
Personal Competencies
Personal competencies can be described as the ability of an individual to develop emotional intelligence. This skill is majorly discussed using self-awareness and self-management attributes. In self-awareness, an accountant can realize his/her emotions, the way they affect themselves and others. Without having the basic knowledge of individual's feelings then it becomes hard to proceed to other EQ competencies. Self-management is an attribute that comes in to ensure that one's emotions do not control the decision they make despite the situation at hand. It provides that one learns to manage his/her emotions and besides that gains motivation out of these emotions. In personal competence, an accountant should be able to access his/her emotional state. Daniel Goleman (2006) portrays self-assessment as people who can reflect and learn from their experience and know their strongholds and weaknesses. The figure below summarizes Goleman description on self-awareness.
Figure 1: Competencies that assist in achieving self-awareness.
Broad Business Perspective Competencies
According to American Institute of Certified Public Accountants (AICPA), business competencies represent the broader field, where accounting profession is implemented. These perspectives include the strategic perspective, where a competent accountant is expected to analyze and evaluate data to have a strategic plan and management of data. Process and resource management perspective requires the identification of business plan techniques and their application in operations of an organization. Customer perspective requires an accountant to understand the customer's needs in adapting to changes in the market environment and its impacts on the company. The other aspects include governance perspective dealing with the management of an organization and global perspective that analyzes risks of opportunities and the relevant impact to the business.
Functional Competencies
Functional competencies of an accountant are characterized by decision modeling, risk analysis, measurement, and reporting abilities. Decision modeling is the use of objectivity in analyzing a situation before enacting a decision. Risk analysis involves reducing the likeliness of an audit resulting in an error. Measurement describes the criteria used by accountants to measure about the format put in place. Lastly, reporting involves a productive conversation with those who require the financial information generated. Any accountant who portrays all these traits can be said to be competent, and the company can have trust in him/her since they have the ability element.
Benevolence
Benevolence is the second element in the Model of Trust Enhancement. Benevolence does not represent only being kind to others but also desiring to do good to other people in the society. According to Akers (2000), benevolence is the "preservation and enhancement of the welfare of people with whom one is in frequent personal contact." He goes on to state the virtues portrayed by benevolent accountants as helping, forgiving, honest, responsible, and loyal. Accountants should be willing to perform given responsibilities that will benefit the public. According to the AICPA Code OF Professional Conduct, benevolence is enhanced by ensuring that clients receive professional accounting services. CPAs operate on a mission of showing commitment and adhering to the public interest. An accountant should, therefore, be selfless by respecting customer's needs with no hidden motive. AICPA section 53 explains clearly that federal benefits should outdo personal interests in any given organization. The client expects that the professional accounting respects the set AICPA code of ethics. The accountant should with this effect respect and protect the interest of the clients. The accountant meeting the clients, therefore, achieves loyalty. The auditor should respect the confidentiality of an individual's needs. Keeping information confidential will make the client develop trust with the accountant. AICPA promotes sound corporate governance by introducing investor education as a way of improving financial reporting (Clikeman, 2003).
An accountant should develop a reputation for being a right person. Clients will be attracted to work with generous individuals who are ready to listen to them and maintain the confidentiality of their needs. However, nowadays the element of benevolence is scarce in the business field. Benevolence also extends to such kind of people who would give out their belonging to a needy person. A good example is the case of the Good Samaritan in the Bible. They toil to ensure that their clients are comfortable before they are. An accountant who portrays benevolence element respects one characteristic that is very crucial in the Model of Trust Enhancement.
Integrity
People may confuse between benevolence and integrity. Integrity refers to being honest and open to the clients. Benevolence, on the other side, focuses on having goodwill towards the clients and all members of society. According to the AICPA code of ethics, an accountant should be truthfulness, exercise straightforwardness, and enhance fair dealing. An accountant should not by any chance be associated with a report, information, communication, or returns containing false statements, recklessly furnished reports. According to Section 110.2 of the Code of Ethics for Professional Accountants, any professional accountant is not expected to be in breach of the integrity ethics.
Integrity can be termed as an essential characteristic since an accountant cannot acquire trust if he/she fails to portray integrity. An accountant can be competent and benevolent but lacks integrity hence nobody can trust him/her despite one's hard work. Integrity is the key that assists the client to be able to see other characteristics in an accountant (Fritzsche, 1995). Accountants should be distancing themselves from the intentional chance of deceiving and manipulating financial information, especially in public and private accounting firms. Most of the accounting firms develop their code of ethics that accountants should follow. However, in the absence of these ethics, accountants should come up with their own rules that review their actions to ensure they match the commonly accepted principles.
Professional Judgment
Another element of the Model of Trust Enhancement is professional judgment. It does not adequately apply as a characteristic, but it is the application part of the model. Professional judgment is the process by which accounting professionals solve ethical dilemmas using professional standards. Accounting professionals face many arising issues that require sober decisions. The American Institute of Public Accountants gives them the authority to make moral decisions provided they adhere to the rules and guidelines of their profession (Onyebuchi, 2011). Accounting professionals who comply with this code can make ethical decisions.
Professional judgment varies from personal judgment. In own judgments, individual attitudes and morality determine the kind of decision one makes. In the current generation, personal judgments vary since everyone has what they term as morally right or wrong which may differ in another person. On the other hand, professional judgment requires some level of experience and professional qualifications for their decision to be implemented in the career field. Secondly, some code of conduct that is the AIPCA Code of Professional Conduct controls the kind of decisions expected from an accountant. According to Professional Judgment (2015), relevant training, knowledge, and experience come in to determine the sort of decisions they make for the current circumstances. Some organizations have come in to provide information on the need for professional judgment. These agencies include Public Companies Accounting Oversight Board (PCAOB), Institute of Chartered Accountants of Scotland (ICAS), Committee of Sponsoring Organizations of the Treadway Commission (COSO), and Securities and Exchange Commission (SEC).
Professional judgment is applied mostly in cases of conflict of interest. A perfect example is a specific member of the accounting team who has his/her stake towards the client or their organization. In such a case, professional judgment is needed to ensure that the conflict of interest is handled appropriately (Article III, 2015).
References
Akers, Michael; Giacomino, Don. (2000). Ethics and the accountants’ code of conduct. Marquette University. Retrieved on October 12, 2017 from: http://epublications.marquette.edu/cgi/viewcontent.cgi?article=1000&context=account_fac.
Article III (2015). AICPA Code of Professional Conduct. Retrieved on October 12, 2017 from: http://www.aicpa.org/Research/Standards/CodeofConduct/DownloadableDocuments/2011June1CodeOfProfessionalConduct.pdf.
Clikeman, P. M. (2003). Where auditors fear to tread: internal auditors should be proactive in educating companies on the perils of earnings management and in searching for signs of its use. Internal Auditor, 60(4), 75-80.
Fritzsche, D. J. (1995). Personal values: Potential keys to ethical decision making. Journal of Business Ethics, 14(11), 909-922.
Goleman, D. (2006). Emotional intelligence. Bantam.
Onyebuchi, V. N. (2011). Ethics in accounting. International Journal of Business and Social Science, 2(10).
Professional Judgement (2015). AICPA. Retrieved on October 12, 2017 from: http://www.aicpa.org/InterestAreas/FRC/Pages/professional-judgment.aspx.
