Did you hear?… Executives split on commonality of questionable accounting procedures

When it comes to hinky accounting procedures, the business world seems to be evenly split between pessimists and optimists. Half of senior executives and managers say questionable accounting practices are common in business today, while the other half say they are rare, according to results from a recently released survey from NFI Research.

Forty-two percent of survey respondents describe questionable accounting practices as somewhat common, and 8 percent say they are very common.

One respondent wrote: “Sadly, lower standards of moral behavior seem to be more and more a hallmark of our western culture, focused on self centeredness and wealth and power at anyone else’s expense. It reflects itself in accounting and business practice.”

On the flip side, 38 percent of executives and managers believe questionable accounting practices to be somewhat rare, while 12 percent say they are very rare.

“I believe most executives are honest and trustworthy,” one more optimistic survey participant wrote. “The few bad apples have lost their moral compass in the quest for success.”

Almost three-quarters (74 percent) of executives and managers surveyed say they believe earnings and profit pressure are a leading cause of businesses to conduct questionable accounting practices, while almost half (48 percent) blame a lack of ethics. And, more than a third of respondents reproach pressuring top executives (39 percent) and lack of oversight by boards of directors (34 percent) for their roles in the situation.

Less than a quarter (24 percent) believe honest mistakes to be a leading cause.

“Unfortunately, accounting rules are often a moving target,” a survey respondent noted. “Standard practice today may be questionable (or even fraudulent) next year. In addition, some rules sound good in concept but are impossible to implement in a rational and consistent manner. It would be nice to have a world where all the beans were counted with the same, simple rules. But we are a long ways from there, and it seems to get more complicated all the time.”

NFI Research (www.nfiresearch.com) is a U.S.-based research firm that identifies and analyzes trends and attitudes in business and organizational management.