Ethics and bookkeeping

What should a bookkeeper consider when it comes to gray areas? Doing the right thing is something every industry deals with, but bookkeeping can be somewhat unique. We are exposed to information and risks nobody else in the company is, aside from the directors and owners.

It comes down to a combination of doing what’s right and risk management, both for myself and my client.

There are a couple different situations I can be in as a bookkeeper where ethics and risk management come into play.

First, there may be a case where I think my client is in somewhat of a gray area on what they’ve asked me to do.

Everyone has their own sense of right and wrong. When my client has asked for something in a gray area, it comes down to risk management. In those cases, it can be easy for me to say, “If you can defend this in front of the IRS, then do it. If you can’t, then don’t.”

Second, there may be a case where I think something my client is asking me to do isn’t ethical.

Even in cases where I don’t have legal responsibility to the IRS because I didn’t make the actual decision, I still may have ethical responsibility in the situation.

Of course, I can decide that’s a client I don’t want to work with any longer. Usually one unethical request like that means more may be coming in the future.

And who ends up getting blamed? The bookkeeper. My clients are just as susceptible to human nature as anyone else, and people in a crunch situation tend to forget who made the actual decision.

Fortunately, I’ve never had a client audited where that was the situation. In fact, I’ve only had one client audited. They were working with a CPA as well, so the CPA handled everything. And we already had everything in order, so it wasn’t an issue.

But when difficult decisions come up, I have to consider both the ethical responsibility and the legal obligation. I have to do what’s best for both my client and myself.

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