Ferdinand Balfoort

Fredinand Balfoort

What kind of accountant are you?

By Ferdinand Balfoort

Accountants don't star in movies; they are portrayed as fairly boring number crunchers. A rare exception was the movie Untouchables (1987) based on real-life events. It featured two accountants who were absolutely not boring. Oscar Wallace worked with US government agent Elliott Ness' team to gather evidence to convict Al Capone on tax evasion. The other, Capone's accountant George, was responsible for processing Capone’s dirty laundry. Paradoxically, both accountants meet their sticky ends in the same lift.

The duality of the critical accounting roles portrayed in the movie parallels what we may well experience during our professional career. On the one hand, some of us may, consciously or not, engage in the hiding of accounting transactions to protect those who commit illegal or unethical acts. On the other hand, we may use our position to interpret accounting information to identify and bring such perpetrators to justice.

Movie Poster Untouchables 1987

Courtesy Wikipedia

Charles Martin Smith as Agent Oscar Wallace in The Untouchables

Charles Martin Smith as Agent Oscar Wallace
Movie "The Untouchables" Copyright © Paramount Pictures Corporation (MCMLXXXVII)

Movie Poster Untouchables 1987

Brad Sullivan as George
Movie "The Untouchables" Copyright © Paramount Pictures Corporation (MCMLXXXVII)

The Chartered Accountants Australia and New Zealand (CAANZ) recently published important survey results in a report titled “Are Australia and New Zealand Corrupt?” The authors of the survey conclude there is major under-reporting of fraud and corruption in Australia and New Zealand. As if to confirm the duality noted earlier, only 51% of respondents indicated they would report a request for a bribe or an illegal demand.

The actors playing the accountants in the Untouchables portray the ethical and physical hazards they face accurately, especially Capone's accountant George. As with 49% of CAANZ respondents, he is unwilling to divulge information that is badly needed for a solid legal case of tax evasion and bribery of the Chicago Police Department.

Accounting is a powerful language that reflects and interprets the operations of an organisation.  Numbers simply do not lie, as long as there is no creative accounting involved. Even when there is, one number leads to another if you diligently follow the trail, which is why forensic accounting is so stimulating. Our moral courage, integrity and professionalism are a prerequisite for ensuring the numbers in the financial statements are supported by transparent, appropriate transactions, and relevant documentation. If they don't, we are required to ask questions without fear or favour; there is no one else we can defer to. The buck stops with us, or rather the bullets, as both Oscar and George would confirm were they still around.

Our codes of ethics require us to act with integrity and to inquire with professional scepticism if transactions don’t look right. We should consider all stakeholders, including the public, and what impact our actions or inactions have in the eyes of the world. Yet, corruption and illicit trafficking of any nature would not be possible without the acquiescence of a large proportion of our profession globally.  

The next time an operational department submits an unusual invoice for agency fees or consulting, or a surprising financial claim for a trip to Macao with "business partners", clarify the purpose and detail of such expenditures, ensuring that they are accounted for correctly. Ask pertinent questions about unusual variances to identify whether there is anything untoward going on. Will you be Oscar or George when it comes to that critical decision to report your conclusions?

Ferdinand Balfoort advertising Russsian Beer

Boring number cruncher Ferdinand Balfoort promoting Russian beer

Our next TI newsletter issue will consider the different aspects of corruption one may encounter, using common definitions and current examples.

About the author: Ferdinand C Balfoort (MCA,CA,CIA) is an international governance expert with academic and professional expertise and interests in cross cultural impacts on corruption, fraud and financial reporting. He has managed numerous forensic investigations, including corruption and fraud reporting.

TINZ Contributor Ferdinand Balfoort also submitted the following article to the Chartered Accountants of Australia and New Zealand's Newsletter.

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