top of page
  • Konstantin Lichtenwald

Is it Ethical to Hire a Relative as an Accountant?

It is not always acceptable to employ a family member to undertake accounting tasks. Whether you are providing them an incentive, have a conflict of interest, or improperly exploit sensitive information, this might be a hazardous choice. Ultimately, you will need to understand the ethical implications of having a family member prepare your tax filings.


Conflict of Interest Management is an essential component of an ethical policy. The policy describes a method for determining whether a transaction constitutes a possible conflict of interest, as well as the repercussions of such a transaction.


There are two primary categories of conflicts of interest. First, a financial direct interest. This interest differs from the general public interest. A lawmaker must disclose any personal financial interest in a transaction with a government agency.


Second, a tight economic link. This indicates that the lawmaker receives a substantial profit from another commercial group. Even if the lawmaker has no direct financial stake in the other group, this can occur.


State and regional definitions of a conflict of interest vary. A conflict of interest exists, for instance, when a family member works for a rival.


Romantic relationships are another sort of conflict. A romantic relationship between an employee and a management constitutes a conflict of interest.


There are a few things to bear in mind whether you are a professional accountant or want to provide your services. To act with integrity, you must comply with all rules and regulations regulating your trade. It would be beneficial if you were also knowledgeable about ethical concerns.


The IESBA's Code of Ethics has been revised to include additional provisions on inducements. The improvements are intended to improve the Code's clarity and usability. Adopted on January 1, 2020, the revised edition of the Code includes a new "intent test" that forbids inducements that unlawfully influence the recipient's action. The intent test was developed to assist professional accountants in making sound decisions.


According to the IESBA, an enticement is an action or activity that is likely to affect the improper behavior of another individual. It is essential to understand that this does not necessarily indicate that you are involved in shady behavior. There are several forms of inducements, including gifts and hospitality.


Whether you are an employee or an outsider, if you suspect your employer of misbehavior, you should report it. The term for this is whistleblowing. You can whistle directly or lodge a complaint with your employer or a responsible party. If you do not disclose the misbehavior, you may be penalized or lose your job.


Accountants are the most important human resource for reporting misconduct in businesses. An industry-representative sample of accountants was questioned to evaluate their intentions regarding internal and external whistleblowing. Accountants are more inclined to blow the whistle internally than outside, according to these findings. However, there is no evidence that the likelihood of blowing the whistle correlates with the severity of reprisal encountered.


A partial least square structural equation model was developed to assess the measurement's validity. The model found that the mean tendency to blow the whistle was unaffected by the amount of retribution but decreased by the intensity of retaliation.

1 view0 comments

Recent Posts

See All
bottom of page