The Briefcase 20: Key Ethical Challenges Accountants Will Face in 2026

Ethics is something we’ve all had to think more about in recent years, and some professional bodies have responded to this by adding mandatory CPD hours. Thanks for that!

The thing about ethics is that it’s constantly changing. With new tech and new pressures, there are new scandals. Very quickly, you find yourself crossing ethical lines without even realising it.

So, what ethical dilemmas do accountants need to be ready for in the new year? Some are obvious – AI isn’t going away, and we need to be sure we’re using it properly. However, other issues are more subtle. Shifts in workplace culture and new expectations around ESG might turn you into a fuddy-duddy overnight.

Here are the ethical challenges to keep an eye on, and how to stay on the right side of the line.

💻 Keeping it artificial

AI is like that new hire fresh out of uni – fast, eager, and confidently getting things wildly wrong.

Many accountants now rely on AI for everything from data extraction and document review to drafting emails or calculating taxes. The efficiency is great, but there’s the unfortunate issue of ethics to contend with.

Do clients need to know if you used AI? Should you trust the AI’s output, or should you verify it manually? What happens when AI trained on patchy or biased data hallucinates answers? Who’s accountable when something goes wrong? Is anyone?

In the Code of Ethics, this is what we call a threat to objectivity. In practice, it’s when you send a client advice and later, when they write back to tell you HMRC are sending them menacing letters, you realise ChatGPT invented a tax law. It’s probably not worth it, really.

🔐 Under lock and key

Confidentiality is one of the golden rules of accounting. It makes sense – no one wants a gossipy accountant. However, with tech accelerating at breakneck speed, it’s getting harder and harder to keep sensitive data under wraps.

Ransomware, in particular, is a bigger problem than most of us realise. We’ve all heard the horror stories – the company that paid up, or the one that refused and took the hit – but what about the ones that quietly settled, kept it out of the press, and carried on like nothing happened? Behind the scenes, there’s a lot more going on than anyone’s admitting!

Remember that big story about the British Library? Back in 2023, the library suffered a major cyberattack from the Rhysida group, who demanded a £600k ransom. When they refused to pay, the hackers dumped 600GB of data online. It makes that forgotten copy of War and Peace that you checked out seem less of a big deal.

And now the UK government is considering making it illegal to pay ransoms at all. So, if you get hacked, you won’t even have the option to pay the people holding your data hostage. When they start sending you envelopes with your data’s toes in them, you just have to grin and bear it.

Now imagine a cyberattack on a mid-sized firm holding tax records, payroll data, or investor reports. The financial and reputational damage could be enormous, especially if your ethical or professional standards mean you can’t buy your way out.

The ethical principle of confidentiality doesn’t just mean "don’t tell your mates about your client’s weirdly high toilet paper bill". In 2026, it means encrypting data, setting user permissions properly, auditing access, training staff to spot dodgy emails, and keeping MFA switched on – even when it’s really, really annoying.

📉 Cheat day

Corruption can sometimes feel like it’s on the rise. Maybe that’s because we’re all cheating on our ethics exams.

In 2025, the US PCAOB fined the Dutch arms of Deloitte, PwC, and EY $8.5m for widespread exam cheating. Hundreds of staff – including senior leaders – shared answers on mandatory integrity and independence tests. One year earlier, KPMG Netherlands was fined $25m for similar behaviour. That’s right, the Big Four rigged scores.

The cheating speaks to a wider problem, and one that’s harder to solve. Stories like this can only happen in organisations where the culture not only permits it, but encourages it. A load of older staff members who cheated on their exams are probably going to encourage the younger members to do the same.

♻️ The grass is always greener

ESG reporting is a booming new business area, and that inspires some less-than-honest behaviour.

In 2024, Lloyds Bank had an ad banned for implying it was financing a green energy revolution, while its actual investments told a different story. To be fair, you’d have to be pretty naive to imagine one of the biggest banks in the world wasn’t heavily involved in fossil fuels, but that doesn’t mean it was okay!

The problem is that ESG data is often messy and qualitative. It’s just extremely easy to present the data in a way that makes HSBC look like the Che Guevara of building solar panels.

To go back to the Code, this threatens integrity and professional scepticism. We all know not to fudge the numbers, but we need to know not to fudge the narrative, too.

🧠 Final thoughts

In the coming year, we’ll be watching AI become more powerful and more embedded in everything we do, and we’ve got to ensure we don’t overrely on it. We’ll need to scrutinise ESG data, instead of just accepting a company’s story about itself. We’ll also need to fend off hackers who may be better resourced than we are. On top of all this, we need to make sure that we treat the people around us with respect – which can be hard at month-end.

If you don’t pay attention to the way trends are emerging, you might end up stepping in it. Just ask Prime Minister Sir Keir Starmer, who recently got told off by a primary school teacher for doing the "6-7” meme with some kids. If it can happen to him, it can happen to anybody.

In short, ethical awareness in accounting is about rules, yes, but it’s also about reading the room – whether it be the boardroom or the classroom.