Financial abuse – role of accountants

Content Summary

The role of the accountant

Accountants, as trusted professionals, are required to act in accordance with the highest professional and ethical standards.

A fundamental principle that guides ethical practice is that the accountant must be objective and "not allow bias, conflicts of interest, or undue influence of others to override professional or business judgements". Another is that accountants must exercise professional competence and due care.

It would be contrary to those principles for an accountant to knowingly or negligently facilitate arrangements that expose an older person to financial abuse, and it would be ethically and morally unacceptable to "turn a blind eye" to suspected abuse.

The professional accountant must not merely follow instructions; they must ensure that the client is properly advised, even in instances where the client has not actively sought advice.

Although specifically drafted for lawyers, Senior Rights Victoria’s publication “Assets for care” provides guidelines that are equally relevant to accountants and financial advisors, including:

  • avoid conflicts of interest
  • give comprehensive and independent advice so the older person can make an informed decision
  • be fully informed
  • consider your client's motives and intentions
  • suggest alternative ways to achieve the desired outcome
  • preferably talk to the older person alone, without the presence of the person who has influence or control over them
  • suggest the client enters into a formal rather than informal arrangement, such as a Care Agreement and an Enduring Power of Attorney
  • be satisfied that the older person has the capacity to make the decision
  • consider whether your client, if the older person, displays capacity to act
  • be satisfied that the client is not being influenced by the person seeking to receive benefit
  • be satisfied that the client is entering into the transaction freely
  • ensure the client receives and understands your advice
  • be sensitive to cultural and language influences
  • if necessary, be prepared to refer the older person to external agencies who can help
  • refuse to carry out instructions which you believe are likely to be either illegal or unethical
  • fully document all discussions and confirm your advice in writing to your client.

Where illegal activity is suspected:

  • bring it to the attention of the client
  • encourage the client to seek advice from one of the State or Territory’s elder abuse services
  • encourage the client to report it to the police, and
  • ensure that you thoroughly take notes of your advice.

The accountant should proceed cautiously, being careful to avoid any action that may do more harm than good to the individual and family.