Avoiding the perils of misinformation and disinformation

This article builds on concepts explored in the March/April 2023 issue of CPABC in Focus¹ and draws from CPA Canada’s February 2022 discussion paper Identifying and Mitigating Bias and Mis- and Disinformation.²

Objectivity is one of the fundamental ethical principles of the CPA profession, and adhering to this principle requires registrants³ to be vigilant about—and refute—misinformation and disinformation.

In its discussion paper, Identifying and Mitigating Bias and Mis- and Disinformation, CPA Canada recommends that professional accountants use a layered approach to ensure that they meet their professional obligations of objectivity, integrity, professional competence, and due care when reviewing and preparing financial information.

Misinformation, disinformation, and the pertinent rules

Before delving into this topic, it’s important to note that although misinformation and disinformation both pertain to false and unreliable information, they differ in terms of intent. Misinformation is generally considered unintentional, whereas disinformation involves deliberate deception.^4,5

Regardless of this distinction, however, both are dangerous, and there are three rules in the CPABC Code of Professional Conduct (CPA Code) that apply to the handling of such information:

• Rule 202.2 (Objectivity) – “A registrant shall not allow their professional or business judgment to be compromised by bias, conflict of interest or the undue influence of others.”
• Rule 203 (Professional competence) – “A member shall sustain professional competence by keeping informed of, and complying with, developments in professional standards in all functions in which the member provides professional services or is relied upon because of the member’s calling.”
• Rule 205 (False or misleading documents and oral representations) – “A registrant shall not:
  1. Sign or associate with any letter, report, statement, representation or financial statement which the registrant knows, or should know, is false or misleading, whether or not the signing or association is subject to a disclaimer of responsibility; nor
  2. Make or associate with any oral report, statement or representation which the registrant knows, or should know, is false or misleading.”

The guidance summarized

As noted earlier, CPA Canada recommends that professional accountants adopt a layered approach when it comes to staying onside of their ethical obligations. Here’s a summary of the guidance:

Producing accurate and objective work

To maintain public confidence in the profession, it is imperative that professional accountants ensure the accuracy and objectivity of their work. This means:

• Using appropriate standards of practice when gathering and evaluating evidence and information;
• Exercising due care, professional skepticism, and curiosity when scrutinizing assertions and evidence;
• Considering the contextual factors of any given situation and ensuring that the information provided is relevant and suitable for the circumstances; and
• Communicating to stakeholders, when necessary, the limitations inherent in the work product, such as lack of certainty associated with financial estimates and predictions.

Ensuring that information is reliable

Per Rule 205, professional accountants must diligently evaluate the reliability of the evidence they use in preparing, presenting, and sharing information. They can accomplish this by:

• Staying informed of professional advancements and news;
• Seeking diverse perspectives and avoiding “echo chambers”;
• Researching and evaluating the credibility and qualifications of the individuals and organizations responsible for producing the information;
• Referring to the original source whenever possible; and
• Fact-checking and cross-checking information.

Rigorous fact-checking is a fundamental weapon in the battle against misinformation and disinformation, but it can be difficult to know where to look given the sheer volume of source material available in the age of the Internet. As a start, there are several government and academic databases of financial information available to help us fact-check many financial assertions, including:

• Statistics Canada – Canada’s national statistical agency gathers information on a wide array of topics (statcan.gc.ca);
• SEDAR – The System for Electronic Document Analysis and Retrieval is the database of Canadian public company disclosure maintained by Canada’s securities regulators (sedar.com);
• EDGAR – The Electronic Data Gathering, Analysis, and Retrieval system is the database of American public company information maintained by the United States Securities and Exchange Commission (sec.gov/edgar/search-and-access);
• Private-sector investment services – Morningstar, Bloomberg, and Dun & Bradstreet are three examples; and
• US statistics agencies – Some of the better-known agencies include the Bureau of Economic Analysis and the Bureau of Labor Statistics.

Identifying bias

Note, however, that fact-checking alone may not be enough to ensure the reliability of information. As discussed in the March/April 2023 issue of CPABC in Focus, various forms of bias can hinder objectivity and accuracy.⁶

It is, therefore, vital to consider the potential for biases when sourcing information—this includes identifying the funding sources behind any conducted research. It also means considering the context in which information is being shared. When drawing information from a media source, for example, is the information being presented as news, commentary, or opinion? Discernment is warranted, as content presented as opinion will likely lack impartiality and instead aim to bolster the author’s perspective.

At the same time, we must remain self-aware and consider the impact of our own biases when sourcing information—otherwise we risk accepting inaccurate information as truth simply because it aligns with our own existing beliefs or hypotheses. Failing to acknowledge and mitigate this kind of confirmation bias as a potential risk could undermine even the most diligent of fact-checking efforts.

In its discussion paper, CPA Canada provides four tips to help us ensure our objectivity:

• Avoiding “motivated reasoning,” where we justify a position because we simply want it to be true;
• Practising humility by recognizing the limits of our knowledge and expertise;
• Looking for blind spots and testing assumptions, rather than defending set positions; and
• Avoiding overconfidence in estimations and recognizing the potential for error.

At the organizational level, leaders can also help combat confirmation bias (and other forms of bias) by building teams of individuals with diverse backgrounds and different perspectives. Where possible, they can also ensure that two or more analysts address and verify each key data set.⁷

Final thoughts

In the World Economic Forum’s 2022-2023 Global Risks Perception Survey report, “misinformation and disinformation” ranks sixteenth on a list of 32 global risks ordered in terms of severity over a two-year period.⁸ Over a 10-year period, it jumps to #11. While the World Economic Forum categorizes misinformation and disinformation as a societal risk rather than an economic one, the potential ramifications of false information stretch into every aspect of modern life. As professional accountants, we have an ethical obligation to protect the public, and that means watching out for and proactively countering misinformation and disinformation in all that we do.

Do you need guidance?

The guidance in the CPA Code is designed to help you understand how the rules should be applied. CPABC’s professional standards advisors are also here to help. You can consult them for confidential guidance to ensure that you stay compliant with the CPA Code and the CPABC Bylaws when navigating difficult situations. Contact our advisors by email at professionaladvisory@bccpa.ca.

This article originally appeared in the July/August 2023 issue of CPABC in Focus.

Footnotes