Monday, October 14, 2019
Conflicting Clients Interest; Case Analysis
Conflicting Clients Interest; Case Analysis Table of Contents What is Ethics? Moral Issue in the Case Possible Solutions to the Case Key considerations and Judgements Conclusion References What is Ethics? Professional ethics includes the personal, corporate and the organizational standards of the behaviour which is expected of the professionals. Professionals, who are working in esteemed professions, are well versed in exercising specialist knowledge. Professional ethics involves the governance of this knowledge when a service is provided to the public. Generally, professionals are good in making decisions, judgements and applying the skills to justify the decisions made by them later when there arises any discrepancy. Business ethics, also called corporate ethics is a form of professional ethics which examines the ethical principles (moral principles) and the problems that happens in a business environment. TodayÃ¢â¬â¢s organization defines their approach towards professionalism through a set of discrete components. Some of them are mentioned below: Informally, a profession is a vocation that requires a high level of education and some amount of practical experience. They also take actions for the welfare of their clients. Professional ethics encompasses relationships with and also responsibilities towards the following set of stakeholders of a company: customers, clients, co-workers, and employees, others who are directly or indirectly involved in using or creating the goods and services of the company. Professionals in todayÃ¢â¬â¢s context mainly include software engineers, consultants, doctors, layers, programmers, developers and the like. Some of the common guidelines that underscore all of them are mentioned below: A professional accountant in general has a moral responsibility to enhance and protect the business goals of his or her clients. The professional code of ethics as per the CCAB bodies does not in any way allow a professional accountant to hinder from fulfilling the duties. An accountant would always want to act in the best interest of his or her clients. There might lots of instances in due course of time which will test the ethicality and the moral obligation of an accountant. But caution must be exercised in that such ethical dilemmas are carefully analysed and due decision is taken which will protect the interest of the client as well the professionalism as an accountant. This is very important given the fast paced and money minded nature of todayÃ¢â¬â¢s business world. There are many professional bodies which protects the interest of such professionals and acts in the interest of the profession (Gendron et al., 2006). Let us analyse the ethical dilemmas that arises in the case of Ã¢â¬Å"Case Study 3 Conflicting ClientÃ¢â¬â¢s interestsÃ¢â¬ . The case analysis is presented as mentioned in the framework Ã¢â¬ËA Strategy for Understanding, Developing and Presenting Moral ArgumentsÃ¢â¬â¢ (Icaew.com., 2015). Moral Issue in the Case The case deals with a sole practitioner providing accountancy services for a client who is in to the business of selling hardware products for electrical services. Some of the services that the accountant provides are: preparing annual account statements, tax compliance and also currently the client has asked to provide due diligence for the purpose of purchase of another small hardware business. The accountant is also a continuity provider for another accountant who is also a sole practitioner, as he is not able to carry out the work because of medical reasons. One of the clients of the accountant who is ill is also planning to purchase the same small hardware business that the client of the accountant is intending to purchase. The new client is well known of the fact there is also another bidder for the business but is unaware of the fact the accountant who is involved is also performing due diligence for the competitor. Here comes the ethical dilemma in the case. The accountant wa nts to help the new client and provide value service on behalf of the accountant whom he is providing service to the client. At the same time, the accountant also realises the fact that he is supposed to maintain the confidentiality of information as per the agreement with his regular client (Icaew.com., 2015). The moral issue in the case mainly focuses on three core principles of professional ethics as follows: The accountant should be straight forward and honest. But at the same time, how can he ensure that he does not use the confidential information of one company when he is performing due diligence for the other. By doing so, he should ensure that he protects his reputation as an accountant and at the same time safeguard the reputation of his profession (Icaew.com., 2015). It is common for corporates today to have their code of conduct. On similar lines, it is also imperative for professional organizations to possess professional code of conduct. It provides statements pertaining to ethical values and also reminds workers that behaviour which is ethical is a critical part of the job. There are many organizations for professionals in their respective professions to register with them and maintain their code of conduct in their disciplines. For example, for computer professionals, the main professional organizations are ACM, IEEE computer society. These organizations jointly evolved the S oftware Engineering Code of Ethics and Professional Ethics. They underline the basic values like honesty and fairness (Lee, 1995). Possible Solutions to the Case Here in the case, it is very vital to understand that the accountant has responsibility for the practitioner on account of whom he is providing continuity services. He cannot let him down for his own good. It may be assumed that Company A may perform well out of the synergy that the company gets by acquiring as they are in the same line of business. However, this information is to be kept confidential by the accountant and not to be disclosed to company B. Doing so will violate the confidentiality clause which the accountant has signed with Company A. The accountant also has to comply with the professional code of ethics as an accountant and must act true to his profession because accounting being very critical information for a company (Icaew.com., 2015). The main parties affected in this case are that of the accountant himself, Company A and its promoters, Company B and its promoters, the target business which both A and B intend to acquire. The practitioner for whom the accountant is providing the continuity services will also be affected in this process. In an attempt to arrive at the solution to the case, none of the affected parties should be involved because; an attempt to involve any of the above parties in itself will breach the clause of confidentiality. Hence, the accountant on his own discretion should come up with the possible course of action. It may be considered that the practitioner on behalf of whom the accountant is acting as a continuity service provider may be taken in to account if the accountant feels the need for such a moral obligation (Icaew.com., 2015). The accountant should not disclose any kind of confidential information gained during the due diligence process to the directors of the company B. Also, the information should not be used which will give an undue advantage to Company B. The complication results from the fact the accountant has to work on behalf of the practitioner for whom he is providing the continuity services. The conflict can be avoided by declaring openly to the director of Company B. Even in this case, caution must be exercised in that what information to be disclosed and what not to be shared with the client. Also, the threat if any to confidentiality principle should be evaluated between the two clients. It is highly vulnerable to go for a decision which will give the company B that the accountant will do justice to both the companies and hence such a situation should be avoided under any circumstances. Hence, care should be taken such that which will ensure that the conflict of interest between both the comp anies A and B should be declared and stated explicitly (Icaew.com., 2015). Key considerations and Judgements It should be clearly mentioned that it would be impossible to act on behalf of the company B for carrying out the due diligence. There is always a moral responsibility towards the previous client and hence any violation arising out by servicing to the company B should be stated well in advance to the director of Company B so that he may exercise caution in the process. Such a disclosure should be well documented and maintained in case of any future discrepancies that may arise. There may occur a condition when the accountant may be forced to disclose the name of the other bidder. In such a situation, the name of the bidder should not be disclosed to either of the parties. This will only ensure that the threat of confidentiality is safeguarded. This is one of the last options to resort to as this situation to as such a situation arising is very difficult (Anderson-Gough et al., 2000). This is very important, the accountant is still in a moral obligation to provide services to the comp any B as the accountant is acting on behalf of the practitioner who is ill and unable to provide services to the company B. The practitioner can also be kept informed if it is deemed possible (Icaew.com., 2015). Under any circumstances, it is advised that detailed steps are well documented which will ensure that any future discrepancies are well protected and no breach of confidentiality arises in any situation. Hence the accountant is expected to clearly maintain the records of all the due diligence documents which he can refer to at later point of time in case of any complaints from any of the concerned or intended parties (Anderson-Gough et al., 2000). Conclusion From the above case, it can be seen that the issue of ethics is highly critical and severely impact the lives of people. Hence, professionals are expected to be highly ethical in their roles and understand the implications that arise of their immoral behaviour. It is also important that the organizations also encourage this ethical behaviour in their employees and promote this professionalism as a culture in their company. There are many organizations for professionals in their respective professions to register with them and maintain their code of conduct in their disciplines. Organizations should provide training programs to their employees on the severity of this aspect and also create awareness to the potential risks arising out of this (Lee, 1995). There are several other cases which highlight the different aspects of ethical behaviour. Professionals face the ethical dilemma in their day-to-day jobs and it is very important that ethics is never compromised. This will benefit the m personally, the organization for which they work and also the society at large. References Anderson-Gough, F., Grey, C., Robson, K. (2000). In the name of the client: The service ethic in two professional services firms.Human Relations,53(9), 1151-1174. Gendron, Y., Suddaby, R., Lam, H. (2006). An examination of the ethical commitment of professional accountants to auditor independence.Journal of Business Ethics,64(2), 169-193. Icaew.com. (2015).Practice case studies about resolving ethical problems | Ethics | Technical | ICAEW. Retrieved 29 January 2015, from http://www.icaew.com/en/technical/ethics/ethics-in-practice/practice-case-studies Lee, T. (1995). The professionalization of accountancy: a history of protecting the public interest in a self-interested way.Accounting, Auditing Accountability Journal,8(4), 48-69.