Exam cheating can become a ‘big issue’ if not appropriately addressed

The accountancy industry must tackle exam cheating appropriately to avoid it becoming a “huge issue”, according to online assessment provider Questionmarks’, executive vice president, Neil McGough.

The Financial Reporting Council (FRC) conducted a review in July 2022 of the controls and assurances that are currently in place at the professional bodies and the largest UK audit firms. This review was evoked after several regulatory sanctions were imposed on audit firms around the world regarding exam cheating.

The (FRC) reported they had become aware of “instances of cheating” in the UK, but the information provided by Tier 1 audit firms has shown it is not a “systemic issue”.

A US accounting watchdog fined KPMG $2m following claims their UK business failed to prevent the widespread sharing of answers from 2018 to 2021. Instances like this have revealed to the FRC that improvements are required from UK firms and all recognised qualifying bodies (RQBs).

UK RQBs and Tier 1 audit firms have “committed to reviewing or updating some of their policies and procedures,” according to Sarah Rapson, Executive Director, Supervision at the FRC.

McGough believes that all parties involved must respond swiftly and clearly to “maintain public trust” in the accounting industry.

“It was interesting the FRC made clear that there isn’t a sliding scale of acceptable behaviour in differentiating between external exams and internal exams. In these kinds of industries, internal exams must be treated with the same level of integrity as external examinations” he notes.

Ann Lamb, director of professional qualifications at ACCA says, “the cheating issues uncovered within the firms were serious and impacted the reputation of the accountancy and audit profession.”

Rapson says the FRC are “pleased with firms’ and professional bodies” engagement with inquiries and are pleased that the organisations where problems had been discovered have agreed to update their policies and procedures.”

Base Level for exam structures needed  

While it is Tier 1 firms the FRC worked alongside for its report, McGough acknowledges the difficulties Tier 2 firms will also experience.

“If [exam cheating] is an area Tier 1 firms are struggling to get a handle on with the scale of the resources they have, then the complexities will in some ways be harder for tier two firms” he says.

McGough thinks it is important that the industry determine the “base level” of appropriate exam structures in terms of how they build “test security and how you set a culture around it”.  This would allow Tier 2 firms to lean on the learnings Tier 2 firms are gathering.

Remote examinations

Although since 2020, examination procedures has been impacted by Covid restrictions, ACCA are confident its “added security measures” have eliminated the ability for individuals to “benefit from malpractice.”

“The use of specialist invigilators to check the students in and check their equipment and surrounds, using live invigilators and AI throughout the exam, and then follow up checks during our marking and moderation processes” was implemented by ACCA to secure remote examinations.

Bruce Cartwright, chief executive of the Institute of Chartered Accountants of Scotland (ICAS) echoed this point, noting ICAS enforced “stringent marking methods” to safeguard the “quality and trust” of the CA qualification.

The FRC will continue to act to hold firms to account for any shortcomings that might be identified in future examination procedures.

Exam cheating common in all industries

The various exam cheating cases in the accounting industry globally have shone a light on the issue for accountants, but McGough believes it is common in all industries with a qualification procedure.

The best route to prevent more scenarios like this is to “stop looking at this purely as a UK accountancy issue because I think it’s very hard to solve at that level and instead look at it as a world worldwide issue for all companies” he adds.

McGough says this requires a “culture shift” as some firms look to do the “bare minimum” because they don’t realise these issues can affect their revenue and reputation.