In an ideal world, every client you take on will be an upstanding, law-abiding citizen. The reality is that a person with a criminal past can also have financial affairs that need management. 

CA ANZ has received calls from members who’ve been approached by people who’ve been accused or convicted of crimes such as fraud, drug offences, driving offences or assault. So, what do you do in this situation? Should you still take them on as a client?

“If you know the potential client’s background, you will need to decide if you can act objectively with integrity and maintain your professional behaviour. These are fundamental principles in the Code of Ethics.”

What does the Code of Ethics say?

The Code of Ethics does not specify if the member can or can’t take on a client. Even though someone may have a criminal past or has previously have been arrested, it doesn’t mean they can no longer seek an accountant to attend to their financial affairs.

The Code states that when applying the conceptual framework, you need ‘an inquiring mind’. This involves considering two key questions:

1. Do you understand all the known facts and circumstances?  

• What type of crime was the potential client involved in? This may influence the extent to which you need to check the information the client provides.
• Has the potential client been convicted and already served their time? Or have they been arrested, are yet to be convicted and are entitled to the presumption of innocence?  
• How long ago did this occur? More recent matters are more likely to influence on your decision.
• Is it possible that the potential client is currently involved in criminal activity? Consider carefully whether it is appropriate to act for them.  Will you get caught up in the criminal activity yourself? Can you maintain professional behaviour, and act with integrity and objectivity? If not, you should politely decline the appointment. You may need to seek legal advice in this scenario.

2. Do any other threats exist to you, your team and your firm and are you able to reduce them to an acceptable level?

• You may be concerned if the crime is high profile and how your association with the client could impact your firm’s image, particularly if you work within a small community.  
• Do you feel intimidated by the client, or could you feel intimidated in the future? Could pressure from the client deter you from acting objectively? 
• Would accepting this client jeopardise your obligation to your employees to provide a safe workplace?  
• Can you put safeguards in place to reduce these risks to a level that you’re comfortable with?

Exercise your professional judgement

Apply your training, knowledge, skills and experience to the facts and circumstances presented to you to make an informed decision.

• Is the potential client worth taking on? 
• Can you do a professional job? 

If you know the potential client’s background, you will need to decide if you can act objectively with integrity and maintain your professional behaviour. These are fundamental principles in the Code of Ethics.

Your judgement may hinge on the nature of the crime. If the crime is fraud, for example, you’ll be more wary of the information the client gives you. Keep in mind relevant laws and regulations, especially those that relate to tax legislation. Note APES 220 Taxation Services (Australia) or TG-1 Tax Compliance Services (New Zealand), particularly around false or misleading information.

As for practicalities, if a client needs to sign documents, access could be a challenge if your client is in prison.

Consult your professional colleagues 

Consulting with third parties can help you become aware of, and overcome, any biases you may have in relation to the potential client. This includes talking it over with other professional colleagues, keeping in mind confidential information. CA ANZ’s team of professional and ethical experts is also here to help you.

Consider your organisational culture

In addition, you should think about how your firm might respond to the potential client. This includes employees, other partners and the existing culture within the firm. Will your firm’s employees be able to maintain their ethical principles when working with the client? This means maintaining professional behaviour, adhering to client confidentiality, acting with integrity and being objective.

Summing up, you don’t need to take on a client if you are concerned they are not right for you or your firm. Prioritise your integrity and the safety of yourself and your employees.

Apply the conceptual framework

Finally, whether you can take on a prospective client with a chequered past will also come down to how you apply the conceptual framework underpinning the Code of Ethics.

If you decide to take on a client, do so with an inquiring mind and remain alert to any changes in facts and circumstances. Familiarise yourself with how to disassociate from misleading information and the Non-Compliance with Laws and Regulations (NOCLAR) provisions of the Code. This knowledge will help you take appropriate actions if your initial decision to onboard the client turns out to be incorrect.