prof ethics mind is a blank

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pirate
pirate Registered Posts: 469 Dedicated contributor 🦉
Hi there
have completed all my skills test bt one of the questions got me thinking. This isnt the exact question is a related question and is how i read the question firstly but when read it again was asking something complately differently.
so from a theoretcial point of view
if you were asked by a client of yours to recommend them to say your neighbour who was undertaking a landcaping project as they desperately wanted the work would you put in a good word or not.
I feel it threatens independance and may end up as a bribe as in the cleint would try to reward you in some way later but you are a person are not getting anything out of it and they may then recommend you for the wrong reasons.
i am not sure if this is an ethical dilema or not, you know the client from work but the recommendation has nothing to do with your work. Personally i feel i may not be able to recommend him as I may not know the standards of his work only the profitablity or not of his comany.

also another question which is in the BPP book on page 42 regarding you become aware of a signicant error that you made in a tax return, the answer states that you should tell the client to inform the tax authorites and if they refuse say you will no longer act for them and you inform the tax authroities that you are no longer working for them. Surely though this is your fault and you should make steps to put it right, what happens for example if the clients ends up with a signiifcant penalty as a result should you pay this, is this part of professional indemity insurance.

Anyway would be grateful for your input cant find anything in the books on this and was jsut curious what should happen in this case

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  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
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    pirate wrote: »
    Hi there
    if you were asked by a client of yours to recommend them to say your neighbor who was undertaking a landscaping project as they desperately wanted the work would you put in a good word or not.

    This is a threat to ADVOCAY TO OBJECTIVE and DUE CARE.

    You will try and convince your neighbor to employ your clients for a landscape project. You do not get any reward from the contract but are putting the forward a biased (may be NOT if you are qualified to justify your recommendations) case that could cloud your judgment to professional behavior and due care when recommending your clients for the work.
    pirate wrote: »

    ................. you know the client from work but the recommendation has nothing to do with your work. Personally i feel i may not be able to recommend him as I may not know the standards of his work only the profitability or not of his company.

    Agreed! therefore as an accountant you should always recommend to take advise from the professionals in a given field if you are not competent to give that advise (recommendations)

    pirate wrote: »
    .....also another question which is in the BPP book on page 42 regarding you become aware of a signicant error that you made in a tax return, the answer states that you should tell the client to inform the tax authorites and if they refuse say you will no longer act for them and you inform the tax authroities that you are no longer working for them. Surely though this is your fault and you should make steps to put it right, ............

    As an accountant you will be working as an agent for a client when dealing with HMRC. However, you also have a duty of "not to be associated with misrepresentation on any financial or other documents" prepared by you where others will rely on the integrity of information in that document.

    It is the the client's duty to report any errors or misrepresentation to HMRC. If you inform HMRC then there is a breach of confidentiality to your clients.

    However, under the Money Laundering Act, & POCA you are obliged to report the inaction by your client to MLRO/SOCA. This does not breach the ethical principle of confidentiality of AAT ethics guidelines

    pirate wrote: »
    .....Surely though this is your fault and you should make steps to put it right, what happens for example if the clients ends up with a significant penalty as a result should you pay this, is this part of professional indemnity insurance.

    If you have acted without DUE CARE you could end up with the payment of any damages for not exercising due care and attention expected to the highest professional standards from MAAT (MIP) in preparing tax computations.

    The damages would include the penalties and interest but not the original tax obligations to HMCR

    Damages should be covered by your professional indemnity insurance
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