70% of consumers say their purchasing decisions are influenced by a company’s ethical behaviour according to latest research from the Association of Accounting Technicians (AAT). The study commissioned by AAT for the white paper, ‘Accounting for Good’ looks at how accountants can educate and hold businesses to account with regards to the importance of ethical practices.
The research also found 43% of respondents said not participating in tax avoidance would be an important consideration when deciding whether or not to engage with a business. Other ethical factors which ranked highly for consumers when choosing which businesses to engage with included maximum transparency with regards to company accounts (36%); a strict ethical code about their supply chain (39%) and being careful with sensitive client data (43%).
This indicates that demonstrating strong ethical behaviour is something which companies should take seriously for commercial as well as reputational reasons.
AAT’s research also found that 31% of consumers who were surveyed were willing to pay more for a product or service provided by a company that treats its employees well. Additionally, displaying maximum transparency (22%) was also a factor that would result in them paying higher prices. The findings show that transparent and ethical accounting can also be good for business because consumers are more willing to purchase from companies who engage in best practices.
Commenting on the research, Mark Farrar, chief executive of AAT said: “Consumers are more aware than ever before of business behaviour and how it influences their purchasing decisions. Increasingly, people are being more mindful of how they spend their money and they want to feel confident in their choices. Greater transparency offers reassurance that their money is going to an organisation that fits with their own values.
“The Accounting for Good white paper shows the positive impact accountants can have on society and how they can help drive future growth. Having a strong ethical code and not engaging in aggressive tax avoidance can result in increased profits for businesses, as well as a reduction in the tax gap because consumers are displaying an appetite for engaging with companies who are good corporate citizens. Accountants have a key role in showing businesses how they will benefit from this.”