Ethical and professional considerations

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Financial Abuse of Older People

Ethical and professional considerations


When providing professional advice, accountants have a duty to provide advice and assistance which is competent and ethically sound. The interests of the client are important, but there is a duty to act in the public interest, and not exclusively in the interests of the client or employer.

What is in the client's best interests is not always easy to discern in situations involving potential financial abuse. This is especially so where the suspected perpetrator is a trusted family member or friend.

A decision not to intervene may leave the client exposed to potentially devastating loss and injury. A decision to intervene may trigger family dispute, distress for the client and loss of business for the accountant.

Adults of any age have the right and, unless proven to the contrary, are presumed to have the capacity, to make their own decisions, even bad ones that ignore, or open up potential for, financial abuse.

Intervention is not a matter that should be taken lightly. The professional may face a difficult challenge when deciding upon an appropriate response.

Ethical considerations

  • Avoid conflicts of interest
  • Maintain your client's confidentiality
  • Avoid contributing to the perpetration of unlawful acts
  • Ensure your client is well informed; give comprehensive advice.
  • Ensure your client understands the advice, and has capacity to act
  • Be respectful. With older clients, beware of ageism and making an assumption that, because the client is old and perhaps frail, they are not capable of making a valid decision.
  • Your client's best interests come first

Is it considered abuse if the person is being financially abused doesn’t accept they're a victim?

Unwillingness to accept that they are a victim of financial abuse is a common reaction for older people, particularly where family members are concerned. Denial is a common first reaction to the receipt of bad news for many people, old or young. When loved family members are involved, disbelief that they are victims of abuse can often be followed by anger at the person who suggested it.

Older people often fail to act on abuse. There is a tendency to excuse the failings of their children, a reluctance to get them into trouble. There is a fear of the loss of love, of isolation and abandonment, of loss of contact with grandchildren.

The older person, who is the accountant’s client, has the right to ratify originally improper transactions if they so desire. It is the accountant’s role to make the older person aware of the events and their options, to provide advice in relation to the matter, to ensure that the advice is understood and then to act on the client's instructions.

What do I do if I suspect that the law has been broken?

APES 110 Code of Ethics for Professional Accountants provides guidance on the appropriate response for professional accountants who come across suspected unlawful activity on the part of their client or employer.

Where illegal activity is suspected, the accountant is advised to:

  • explain to the client or employer the potential illegality of the arrangement and get them to stop that activity
  • suggest alternative, legal ways in which the client’s needs might be met
  • disclose the activity if there is a legal obligation to do so
  • if the client or employer does not change the suspect behaviour, then resign from the engagement or employment
  • if disclosure is not mandatory, the accountant should consider whether, in their professional assessment, disclosure is warranted in the public interest. If their professional assessment is that disclosure is in the public interest, they are strongly advised to seek legal advice before proceeding.

Cases of financial abuse of older people most usually involve "improper" conduct and not criminal conduct. During the course of the interview with the older client, however, the practitioner may suspect that unlawful acts have been committed, such as theft, or physical abuse. Whether an act is unlawful is often difficult to determine and is not the role of the accountant to so determine. It is important however that the suspicions be followed up.

Interventions on behalf of the older client must be respectful of that person's rights. They must also be sensitive to the client's situation and be conducted in such a way that they do not make matters worse. The older person may not wish to involve the police, especially where trusted family members and friends are concerned. If the victim does not want to report abuse, even physical abuse, then it is not the prerogative of the accountant to report it for them, unless they believe that the older person is in imminent personal danger, or if they believe that the matter must be reported in the public interest.

The practitioner must let the client know that an unlawful act may have been committed and advise them of their rights. The accountant should advise the client on potential responses to the situation, satisfy themselves that the client understands their rights and the advice, and then seek instructions, confirmed in writing.

  • The practitioner should explain to the client that the suspected unlawful act is no less unlawful because it has been committed by a family member or friend, and recommend to the client that the matter be reported to police, and could offer to call the local statewide elder abuse service with the older person, to get their input.
  • The accountant may themselves refer to external agencies for general advice on how to advise a client in this situation, while respecting confidentiality.
  • If the accountant suspects something illegal or dangerous, he or she should express that to the client, minute it in the record of meeting and confirm it to the client in writing.
  • If the client is the perpetrator, the accountant should explain why they cannot assist the client any further unless the potentially unlawful acts are rectified and discontinued (see below for suggested phrases).
  • All practitioners will have a Letter of Engagement and it is recommended that it limits confidentiality in matters where there is a clear breach of the law. However before relying on any such clause, the accountant should first seek legal advice.
  • If the accountant considers that an unlawful act has been committed and is considering reporting the matter to an authority or body, thereby potentially overriding confidentiality, it is strongly recommended that he or she first seeks legal advice on the matter.

Suggested statements when bringing a suspected unlawful act to the attention of the client who may be the perpetrator

  • "It appears that this act may be unlawful."
  • "The consequence of this act, if unlawful, are …"
  • "If I am involved, the consequences for me may be highly significant."
  • "It may be highly detrimental for me if I were found to be involved in any way."
  • "Here are some options for going about this which are not unlawful ..."

The conversation with the client, whether abused or perpetrator, should be confirmed in writing.

If the practitioner is in doubt as to how to proceed, it is recommended that the statewide elder abuse services be contacted for general advice, or alternatively, contact Ethi-call.

Possible criminal offences

  • Duress
  • Fraud
  • Obtaining financial advantage by deception
  • Forgery
  • Assault or the threat of assault

It should be noted that in some jurisdictions, for example Victoria, economic abuse of a family member is included in the statutory definition of family violence.

Professional considerations

Research has shown that many professionals, when coming across a situation where financial abuse is suspected, take no action. The reasons for this sort of response appear to be:

  • perceived confidentiality issues
  • belief that their actions would not improve the situation.

Additional reasons for lack of action may be:

  • uncertainty that what is being observed is abuse
  • uncertainty as to what to do about it
  • concern about potential conflict of interests
  • lack of willingness to take action when it is the client who may be the perpetrator
  • a desire not to get involved.

Professionalism and the Code of Ethics

CPAs are required under APES 110 to be objective and not allow bias, conflicts of interest, or undue influence of others to override professional or business judgements. They must also exercise professional competence and due care.

CPA Australia requires that its members, as trusted professionals and as members of a highly respected professional association, respond professionally and with integrity. Where financial abuse is suspected, the CPA can use this toolkit to assist them to respond in a way that meets their professional and ethical obligations, that is, to advise the older person that they may be experiencing abuse, provide advice on how to avoid or remediate abuse, and to be cautious in ensuring that they do nothing to contribute to the abuse.

Confidentiality

Much information is provided to accountants which is personal and confidential to the client. Confidentiality must be respected. It is recommended, however, that your terms and conditions of engagement specifically exclude from promises to maintain confidentiality, any events where contravention of the law is evident.

Where information has been provided which indicates potential financial abuse, but does not involve clear breaches of the law, the accountant must bring the potential abuse to the attention of the client and seek their instructions. If the client is the older person, and lack of capacity is suspected, advice should be sought from one of the statewide elder abuse services. 

Client confidentiality must be respected at all times, except where clear breaches of the law are involved. However, advice concerning potential abuse should be provided to the client in writing, and the accountant should not do anything to facilitate the arrangements, unless requested to do so in writing by the older person concerned, and only then when that older person demonstrates capacity and has been fully advised of the potentially negative outcomes.

To maintain confidentiality, and to ensure that you get the whole picture, interviews with the older person should be conducted without the presence of other interested parties. Where the practitioner considers that an unlawful act may have been committed, and is considering reporting the matter to the police, it is recommended that they first seek legal advice before doing so.

Conflicts of interest

The CPA must not act for both clients where there is an actual or potential conflict of interest, for example, between an older person and their adult child.  

Where the client is the adult child (or the potential abuser): 

  • the CPA should recommend that the older person get advice from another qualified party
  • that other party may be a different partner within the same firm, or from a different firm altogether
  • the CPA may assist the older person by recommending alternative qualified professionals.

Where the client is the older person:

  • the CPA should refer the adult child (or the potential abuser) to another qualified professional
  • you need to be absolutely independent of the party with the influence or control over the older person
  • your advice and the subsequent instructions given to the CPA by the client should be confirmed in writing, and sent to the older person, not to their children or other family members, not even if those family members have an enduring power of attorney.

Loss of business

Your client may not welcome you bringing the potential for financial abuse to their attention. In many cases, it is the client’s children who are the potential abusers and the client, if the older person, may not accept that there is cause for concern. After all, you are advising them to be wary of the potential (or suspected) actions of their own children.

If it is the potential abuser who is your client, providing advice brings with it additional challenges.

The practitioner may feel that their advice will be unwelcome, will probably be ignored and may result in the client going elsewhere for more palatable advice. The temptation to ignore the situation, to turn a blind eye can be substantial. The practitioner has a clear duty of care to their client, and has an ethical and professional duty to address concerns of potential abuse. 

This toolkit provides some suggestions as to how to go about providing advice in difficult situations involving potential financial abuse which, when used with skill, may strengthen the relationship with the client. At a minimum however, potential loss of business is not a valid reason for turning a blind eye.

Other considerations

Financial abuse of an older person can be a confronting and difficult challenge for the professional.

  • Give comprehensive and independent advice so that the client can make their own informed decision
  • Ensure your client has the capacity to make the decision and is not acting under undue influence
  • Ensure your client receives and understands your advice
  • Be aware of the impact of cultural diversity and any language barrier
  • Intervene, but be careful that your intervention is respectful and does not make matters worse
  • Be true to your professional integrity and your moral responsibility 
  • Seek assistance and advice from your colleagues and from statewide elder abuse services whenever you feel ill equipped to proceed

When recommending a course of action, clarity of engagement and of the costs associated with proposed action are important in reducing future dispute or loss of the client. This is best achieved through an engagement letter.

Will my actions really improve outcomes?

Adults of any age have the right and, unless proven to the contrary, are presumed to have the capacity to make their own decisions, even bad ones that ignore, or open up potential for, financial abuse. It is not the adviser's role to prevent the abuse. Rather it is the adviser's role to ensure that the client is fully aware of the issues and of their rights and remedies, and that they knowingly and willingly accept the risks of the abuse, or with the adviser's help, take steps to mitigate them.

A CPA who, faced with a situation of actual or potential financial abuse, fulfils that role, will be making a significant contribution to the improvement of outcomes for older people.

Ethi-call

Are you facing an ethical dilemma? A conversation with an independent ethics trained professional can really help. The Ethics Centre’s Australia-wide service, Ethi-call, is free and confidential.

Ethi-call does not provide legal advice.

W: www.ethics.org.au/ethi-call