John Cullinane of Deloittes argued in an Accountancy Age podcast yesterday (link to follow when I can find it) that an accountant can have their own ethical standards but has a duty to point out all possibilities to a client and then do what the client wants so long as it is legal.
Frankly, I think that’s just wrong.
An accountants number one duty is to themselves . They have to sleep at night. Legal is not the same as ethical. If they do something legal that is in their view unethical then they won’t sleep at night. That’s no way to make a living.
Their number 2 duty is to their client base in general. That means one maverick client who wants to do a legal but unethical act should not pull down the reputation of the practitioner or expose their other clients to risk of investigation. And that’s a real possibility these days.
The number three duty is to their tax authorities. I think accountants have a duty to ensure tax is collected cost effectively. Pushing the law to its limits does not help that, does increase complexity and does harm the population as a whole.
Only after that do they have a duty to the individual client. And if that client wants to do soemthing the practitioner does not like, then the practitioner has an easy option. It’s to invite the client to go elsewhere. Which is exactly what I did with more than 50% of all people who wanted to be their accountant whilst I headed a firm.
It’s a lesson Deloittes and the rest of the Big 4 need to learn, soon. I was pleased to note that Mike Warburton at Grant Thornton seems to have done so. When the leading firms follow we might begin to clean up the act of this profession. In the meantime it’s depressing to note that Cullinane is president of the Chartered Institute of Taxation.
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I do have a problem with this – i.e. the notion that it is out of court to present all the possible legal alternatives to a client.
In medicine, the practitioner should surely present the diagnosis, and all the various possible treatments / ways forward.
OK so someone is pregnant and regrets it. The options are – keep the baby or have an abortion. There must be other, more complex sotuations with more options than just 2.
You cannot hide the options. But you can say, “I personally do not agree with option 2” You can even say, “if, after all discussion and counselling, you want option 2, then I will not be able to treat you” – the “go elsewhere” scenario mentioned by Richard.
So what is the difference between a tax / legal advisor and the medical practitioner?
May be there is one, but what is it? One possible difference is that (in the UK system in any case) the medical practitioner is acting pro bono – and the tab is picked up by the public purse, while the tax advisor is being paid by the client.
These two situatuions clearly have different dynamics.
But is that enough to account for the difference which i feel exists here?
[…] As I have noted elsewhere on this site, the practitioner has a duty to more than one client at a time. They must see the world in the round, not in the micro detail of one client and one case if they are to be a true professional. In other words, externalities have to apply to the practitioner’s work and if that is true then externalities have to be considered in the decision making process. The duty to pay tax is an externality in the decision making process, but which has to be considered. If reputation risk is high (as it seems to be for Microsoft and Apple, so they’re hiding their tax planning) or if legality is in question, as is the case in high profile cases such as Barclays seeking to protect its UK customers with accounts in the Channel Islands from the due process of UK tax law under the guise of banking secrecy, then clearly ethics are a key component in the decision process, and in the way it will be judged. I have suggested Apple, Microsoft and Barclays have acted entirely legally but unethically. […]
[…] This is what professional ethics are about. They require the exercise of independent judgement in the pursuit of what is seen to be in the interest of broader society. That’s why I’ve said before now that an accountant has a duty to others before their duty to the client standing in front of them. It’s the fact that this has been forgotten that has given the ‘amateurs’ the chance to eclipse the professionals. The person who claims to be professional but who does in fact merely seek to serve the interest of the piper who calls their tune is not a professional at all. They’re propagandists. And unsurprisingly no one takes heed of them. Nor should they. […]
[…] I wrote a while back I think both wrong (although the difference is fundamental with the commentator on my blog, one of […]