An open letter about dismissing fraud
Dear Manager and Partner,
I don’t know your names. But I chatted recently with one of your staff and I want to tell you about it. “Alexa” approached me privately at a workshop I facilitated, concerned about actions you took with a client.
She felt she witnessed unethical conduct when you allowed your client to deduct expenses that were unrelated to their business. The expenses seemed personal in nature and, as an added bonus, shifted funds from government grants.
I cannot assess whether wrongdoing occurred, but I do know this: Alexa feels really uncomfortable in this kind of environment (thankfully), and she isn’t sure how to approach you again since you brushed her off with “It’s ok.”
For added detail: Alexa trembled while we spoke. I felt pretty bad for her, working in an environment causing this kind of stress.
To keep you in the loop, here’s what I told her:
- Research what guidance, contracts or professional standards were violated or ignored.
- Ask in a calm, professional way: “Can you help me understand how [insert shady action here] is ok, given [insert contract clause and professional guidance here]?”
- If they give you a satisfactory answer, congratulations! You’ve learned something new and tackled a challenging conversation, both skills will serve you well in the future.
- If they don’t give you a satisfactory answer:
- Try again and clarify your question, share your concern and desire to work in an honest and honorable environment.
- Seek input from another member of your firm’s leadership that you trust (and don’t throw anyone under the bus).
- Quit. If you can’t get a straight answer, and you feel your firm engages in unethical actions, there is no reason to stay and a million* reasons to go!
I had another person in the same class, from a different firm, struggle with a mock-ethical-dilemma on a similar topic. She felt conflicted because, “this happens a lot”.
Manager, Partner, your staff see actions they feel aren’t right.
And since you asked, here’s my advice:
- Don’t be shady. Or unethical. This one is obvious but maybe you’ve forgotten.
- If you dip into a grey area, back out. It’s a slippery slope, so admit a mistake upfront, and don’t let it snowball.
- If someone raises a concern about a situation, explain it to them, in a way they understand and make them feel comfortable. Researching the matter can be a task for the staff: point them in the right direction and save time while they learn.
If you resolve this issue, there’s a chance you will keep Alexa around. And I hope that you do, she brings the quality and integrity to our profession that we pride ourselves on and need in our future leadership.
*Top 5 out of 1 Million Reasons to Quit Working for Any Company with Poor Ethics:
- It’s not worth the personal anguish of working with a team that dismisses fraud.
- Who knows what else they are hiding?
- It’s not worth the hit to your professional reputation if the fraud is uncovered.
- It’s not worth the hit to your professional reputation if it’s not uncovered but others know you let it slide right along with your co-workers.
- YOU are worth moving on and have a sound explanation for future employers as to why you left.
Client Confidentiality and Fraud by Herbert Snyder in Fraud Magazine
AICPA Code of Professional Conduct you knew that was coming!