By Jim McFie, a Fellow of ICPAK
Will Your Children Be Able to Live in A Thriving Economy?
Paragraph 250 of the International Code of Ethics Standards for Professional Accountants, as promulgated by the International Ethics Standards Board for Accountants, states that “In many jurisdictions, there are laws and regulations, such as those related to bribery and corruption, that prohibit the offering or accepting of inducements in certain circumstances. The professional accountant shall obtain an understanding of relevant laws and regulations and comply with them when the accountant encounters such circumstances. The offering or accepting of inducements that is not prohibited by laws and regulations might still create threats to compliance with the fundamental principles. A professional accountant shall not offer, or encourage others to offer, any inducement that is made, or which the accountant considers a reasonable and informed third party would be likely to conclude is made, with the intent to improperly influence the behavior of the recipient or of another individual. A professional accountant shall not accept, or encourage others to accept, any inducement that the accountant concludes is made, or considers a reasonable and informed third party would be likely to conclude is made, with the intent to improperly influence the behavior of the recipient or of another individual. An inducement is considered as improperly influencing an individual’s behavior if it causes the individual to act in an unethical manner. Such improper influence can be directed either towards the recipient or towards another individual who has some relationship with the recipient. The fundamental principles are an appropriate frame of reference for a professional accountant in considering what constitutes unethical behavior on the part of the accountant and, if necessary, by analogy, other individuals. A breach of the fundamental principle of integrity arises when a professional accountant offers or accepts, or encourages others to offer or accept, an inducement where the intent is to improperly influence the behavior of the recipient or of another individual. The determination of whether there is actual or perceived intent to improperly influence behavior requires the exercise of professional judgment. Relevant factors to consider might include: the nature, frequency, value and cumulative effect of the inducement; the timing of when the inducement is offered relative to any action or decision that it might influence; whether the inducement is a customary or cultural practice in the circumstances, for example, offering a gift on the occasion of a religious holiday or wedding; whether the inducement is an ancillary part of a professional activity, for example, offering or accepting lunch in connection with a business meeting; whether the offer of the inducement is limited to an individual recipient or available to a broader group – the broader group might be internal or external to the employing organization, such as other customers or vendors; the roles and positions of the individuals offering or being offered the inducement; whether the professional accountant knows, or has reason to believe, that accepting the inducement would breach the policies and procedures of the counterparty’s employing organization; the degree of transparency with which the inducement is offered; whether the inducement was required or requested by the recipient; the known previous behavior or reputation of the offeror”.
Article 79 of the Kenya Constitution states that: “Parliament shall enact legislation to establish an independent ethics and anti-corruption commission, which shall be and have the status and powers of a commission under Chapter Fifteen, for purposes of ensuring compliance with, and enforcement of, the provisions of Chapter Six. Chapter Six states that authority assigned to a State officer—(a) is a public trust to be exercised in a manner that—(i) is consistent with the purposes and objects of this Constitution;
(ii) demonstrates respect for the people; (iii) brings honour to the nation and dignity to the office; and (iv) promotes public confidence in the integrity of the office; and (b) vests in the State officer the responsibility to serve the people, rather than the power to rule them. (2) The guiding principles of leadership and integrity include—(a) selection on the basis of personal integrity, competence and suitability, or election in free and fair elections; (b) objectivity and impartiality in decision making, and in ensuring that decisions are not influenced by nepotism, favouritism, other improper motives or corrupt practices; (c) selfless service based solely on the public interest, demonstrated by—(i) honesty in the execution of public duties; and (ii) the declaration of any personal interest that may conflict with public duties; (d) accountability to the public for decisions and actions; and (e) discipline and commitment in service to the people.
Article 249 of Chapter Fifteen states that the objects of the commissions are to—(a) protect the sovereignty of the people; (b) secure the observance by all State organs of democratic values and principles; and (c) promote constitutionalism. Furthermore, the commissions and the holders of independent offices—(a) are subject only to this Constitution and the law; and (b) are independent and not subject to direction or control by any person or authority. The independent offices are—(a) the Auditor-General; and (b) the Controller of Budget.
One important commission is the National Police Service Commission. Article 224 of the Constitution states that the “National Police Service shall—(a) strive for the highest standards of professionalism and discipline among its members; (b) prevent corruption and promote and practice transparency and accountability; (c) comply with constitutional standards of human rights and fundamental freedoms; (d) train staff to the highest possible standards of competence and integrity and to respect human rights and fundamental freedoms and dignity; and (e) foster and promote relationships with the broader society”.
Some years ago, Fred Juma in an article entitled “The Fight Against Corruption in Kenya is Our Responsibility” stated that “Widespread corruption has become the order of the day and the economy is feeling the heat and the institutions mandated to fight the vice seem to be helpless. On Wednesday, the National Council of Churches (NCC) called on President Uhuru Kenyatta to do away with the Ethics and Anti-Corruption Commission which they said that it had become part of the corrupt system”. President Kenyatta stated that year that Kenya loses two billion shillings every day through corruption, almost eight hundred billion every year. Juma added that “the counties are proving to be the most corrupt of the three arms of government. People at the county level are looting public funds as though their lives depend on it”. He quoted a Mr. Nahashon Tsuma, a high school teacher and also a cleric, who claimed that the problem ailing the country is not really corruption but moral decay; Tsuma says that Kenyans are morally ill but they do not want to accept it.
I was talking to a Muslim lady, Fatma, recently. She pointed out that Muslims hold scripture in high regard. Tsuma quoted the bible but with little precision. Christianity.org points out that the scribes in the bible “were often but not always Pharisees. Their primary duty was to know and preserve the law and lead the people. They were responsible for teaching and interpreting the law. They also handled all legal matters regarding property, estates, and contracts”. In my opinion, Tsuma should have quoted Christ’s statements that people should “Beware of the scribes, who desire to go around in long robes, and love greetings in the marketplaces, and have the most important seats in the synagogues and the places of honor at banquets. Yet they shamelessly cheat widows out of their property and then pretend to be pious by making long prayers in public. Because of this, they will be more severely punished”. In another of His teachings he spoke about Dives and Lazarus. “There was a rich man who was clothed in purple and fine linen and who feasted sumptuously every day. And at his gate lay a poor man named Lazarus, full of sores, who desired to be fed with what fell from the rich man’s table; moreover, the dogs came and licked his sores. The poor man died and was carried by the angels to Abraham’s bosom. The rich man also died and was buried; and in Hades, being in torment, he lifted up his eyes and saw Abraham far off and Lazarus in his bosom. And he called out, ‘Father Abraham have mercy on me and send Lazarus to dip the end of his finger in water and cool my tongue for I am in anguish in this flame’”. We know that what Dives wanted is not possible. We have all manner of churches in Kenya. Many of the pastors are also hell-bent on acquiring excessive wealth. Do they and the others who steal vast amounts of money realize that they may follow Dives to hell? I was discussing a county recently with a friend: he was saying that very few leaders in that county administration are thinking beyond 2027. Obviously, they are not thinking any further forward to where they may eventually end up.
A short while ago, a Kenyan lady working in the World Bank asked me why so many of the accountants that I have trained do not do their work in Government properly. They often join their superiors in stealing. One often risks one’s life if one wants to go against corruption.
Kwame Owino, the renowned economist, has stated that “Given the amount of corruption that is out there, it is a surprise that the economy has not collapsed”. Sustainability is widely debated in these modern times. What is the sustainability of Kenya? Will your children be able to live in a thriving economy? There is a very highly connected Kenyan person who owns sixteen properties in London’s Park Lane, London’s Muthaiga, each worth more than twelve million pounds. Some Kenyans are buying mansions in Dubai. That is money being sucked out of the economy and placing incredible debts on the shoulders of the people of Kenya. A number of Kenyans are as poor as Lazarus. The people who are stealing vast amounts need to be warned that they may end up where Dives did.
