Banishing biases

Everyone has unconscious biases. Recognizing your own can help you make informed, ethical decisions in the workplace. 

Unconscious biases are snap judgments we make about people and situations based upon years of subconscious socialization, according to the Harvard T.H. Chan School of Public Health. Those judgments are made outside our conscious awareness. 

Acknowledging that each person has biases is essential to understanding the impacts of biases on decision-making. Equally essential: The understanding that biases are not inherently negative.  

Acknowledging biases does not make a person racist, sexist or homophobic, for example. In fact, quite the opposite is likely true. Identifying, evaluating and actively seeking to address biases is a key tool to overcome these destructive elements of society. 

Left unchecked, biases pose a threat to personal and professional judgment. In October 2020, the International Ethics Standards Board for Accountants (IESBA) released its final pronouncement of Revisions to the Code to Promote the Role and Mindset Expected of Professional Accountants. The role and mindset revisions emphasize it is important that CPAs be aware of their individual biases when exercising professional judgment. The revisions describe common biases in the context of a CPA's role. 

The below biases can come into play from a diversity, equity and inclusion (DEI) perspective. 

Anchoring bias 

The tendency to use an initial piece of information as an anchor against which subsequent information is inadequately assessed. Example: Individuals might form impressions of various ethnic groups based on the opinions of parents, family members or friends.  

Availability bias 

The tendency to place more weight on events or experiences that immediately come to mind or are readily available. Example: One might develop bias against or toward certain groups of people based on stories or ideas commonly seen in social media.  

Automation bias 

The tendency to favor output generated from automated systems, even when human reasoning or contradictory information raises questions as to whether such output is reliable or fit for purpose. Example: Users might be prone to accept the recommendations of an AI-enabled system without sufficiently questioning the potential for bias in the underlying algorithms. 

Confirmation bias 

The tendency to place more weight on information that corroborates an existing belief than on information that contradicts or casts doubt on that belief. Example: Biases against particular groups can become more ingrained over time because we pay more attention to, and perceive as more accurate, stories that confirm those beliefs.  

Groupthink 

The tendency for a group of individuals to discourage individual creativity and responsibility, resulting in decisions made without sufficient critical reasoning or consideration of alternatives. Example: Leadership teams without sufficient diversity or inclusion might fail to see broader perspectives and make decisions that are narrowly focused.  

Overconfidence bias 

The tendency to overestimate one's own ability to make accurate assessments of risk or other judgments or decisions. Example: It is common to overestimate one’s ability to think and act  objectively, because one is unaware of one’s own biases.  

Representation bias 

The tendency to base one’s understanding on a pattern of experiences, events or beliefs that are assumed to be representative. Example: Expectations about an individual might arise based on stereotypes about the group(s) to which they belong. 

Selective perception 

The tendency for a person's expectations to influence how the person views a particular matter or person. Example: Misunderstandings might arise because of incorrectly interpreting someone’s non-verbal cues based on pre-conceived ideas of how people in that group would respond.  

Mitigating biases 

Anais Nin, a 20th century novelist and diarist, said, “We don’t see things as they are. We see them as we are.” Viewing the world through one’s own knowledge, experience and beliefs limits the ability to be objective. To mitigate biases and develop new perspectives, the Neuro Leadership Institute’s SEEDS ModelTM offers five biases that affect decision-making with mitigation opportunities. 

Unconscious bias and codes of conduct 

A standard of conduct is a hallmark of many professions. The actions and conduct of CPAs are subject to the American Institute of CPAs (AICPA) Code of Professional Conduct. The Code could perhaps be viewed by CPAs as simply another set of rules to follow. However, even in its discussion of compliance, the AICPA has noted the Code’s interplay with other societal elements.  

The Code’s principles and rules of conduct state: “Compliance with the rules depends primarily on members’ understanding and voluntary actions; secondarily on reinforcement by peers and public opinion; and ultimately on disciplinary proceedings, when necessary, against members who fail to comply with the rules.”  

The IESBA Code also highlights the importance of professional judgment in making informed decisions and the need to consider the potential for bias. It says professional judgment is required when the accountant applies the conceptual framework in order to make informed decisions about the courses of actions available, and to determine whether such decisions are appropriate in the circumstances. In making this determination, the accountant might consider matters such as: 

• The accountant’s expertise and experience are sufficient to reach a conclusion. 

• There is a need to consult with others with relevant expertise or experience. 

• The accountant’s own preconception or bias might be affecting the accountant’s exercise of professional judgment. 

From an ethical perspective, more important than mere knowledge of the rules, is a CPA’s willingness to take voluntary efforts to also incorporate ethical concepts, such as unconscious bias, in the application of the Code. 

For example, regarding conflicts of interest, the AICPA Code states: “A member or his or her firm may be faced with a conflict of interest when performing a professional service. In determining whether a professional service, relationship or matter would result in a conflict of interest, a member should use professional judgment, taking into account whether a reasonable and informed third party who is aware of the relevant information would conclude that a conflict of interest exists.”  

How would each of the elements of the SEEDS ModelTM come into play when determining if a reasonable and informed third party who is aware of the relevant information would conclude that a conflict of interest exists? 

The concepts of using professional judgment and looking at the situation through the lens of a reasonable and informed third party illustrate the importance of critical thinking and applying a questioning mindset to identify and mitigate biases. The IESBA Code provides the guidance on actions that might mitigate the effect of bias, such as: 

• Seeking advice from experts to obtain additional input. 

• Consulting with others to ensure an appropriate challenge as part of the evaluation process. 

• Receiving training related to the identification of bias as part of professional development. 

Real-world applications of understanding bias 

Everyday situations in the workplace provide opportunities to consider how biases impact behaviors and how we can better apply DEI concepts. Here’s an example: 

Your team is short-staffed and wants to hire new staff members. The potential for bias: Similarity and expedience biases might lead you to only recruit through the channels you typically use. The solution: By applying DEI concepts, you can actively seek to increase diversity through exploring different sources and encouraging the team to reach out to their diverse networks. 

CPAs in leadership positions can educate themselves and their employees about unconscious bias and even conduct bias training. Recognition and understanding is half the battle, and increasing transparency around DEI topics and how they effect an organization’s ethical decisions can help foster a sense of belonging among all team members. 

This article is excerpted from the VSCPA’s 2022 Essential Ethics course, “Ethical Considerations in Diversity, Equity, & Inclusion: Foundations for Our Profession,” written by Brian Friedrich, CPA, LLM; Clare Levison, CPA, CGMA; and Vivian Paige, CPA.