Accountants are suitable for many key positions within or outside organizations. The American Institute of Certified Public Accountants (AICPA) in its AICPA Professional Standards defines a Key Position as follows:
A key position is a position in which an individual:
a. Has primary responsibility fir significant accounting functions that support material components of the financial statements;
b. Has primary responsibilities for the preparation of financial statements, or
c. Has the ability to exercise influence over the contents of the financial statements, including when the individual is a member of the board of directors or similar governing body, chief executive officer, president, chief financial officer, chief operating officer, general counsel, chief accounting officer, controller, director of internal audit, director of financial reporting, treasurer, or any equivalent position.
This definition is very broad in scope. It spells out the potential relationships between accountants and organizations. Clearly, accountants have a call to exercise due care and diligence when delivering services, always within a frame of ethics and compliance. With this transparent expectation, it is disappointing that some accounting professionals choose to step in the wrong side of the law by abusing the power that comes with certain positions or simply, by committing financial statements fraud.
A former senior financial officer was charged because he aided and abetted a multi million dollar financial fraud at a public company. The evidence against this financial officer were so powerful that he consented, without admitting or denying the allegations of the complaint, to the entry of an order permanently enjoining him from violating, directly or indirectly, Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5. These are the antifraud provisions of the federal securities laws. If it were not enough, he also consented to the entry of an order that bars him for five years from serving as an officer or director of a public company. As part of this legal proceeding, this officer agreed to pay almost $1,000,000. This officer held several key positions that enabled him to manipulate financial information that deceived investors.
Another accountant acting careless was charged as a result of an investigation that uncovered his scheme of contacting vendors and urging them to submit confirmations directly to the external auditors containing false information. Another scheme was performed when this organization had its books and records falsified.
Being in a key position is not an open door for wrongdoing that undermines public trust. It should be a commitment to abide the Principles of the Code of Professional Conduct of the AICPA, which recognizes the profession responsibilities to the public, to clients, and to colleagues.