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How to handle an ethics investigation when you're an accountant

Certified Public Accountants (CPAs) have a lot of strict rules that they have to follow -- and all it takes is one carefully placed complaint to launch an ethics investigation into your practice.

In other words, the odds are high that the average CPA will eventually have to respond to a complaint from a disgruntled client. You can try to prevent it from happening by being as clear and honest with your clients as possible -- but it's also smart to simply understand what you should do if a complaint does get filed to minimize the fallout.

1. Don't panic.

Yes, there is a lot on the line, including your career and your reputation in general. However, this isn't the time to let your emotions hold sway. You need to present yourself with confidence -- even if you're secretly rattled. Stay calm and work on focusing on your defense.

2. Don't blame the investigator.

Remember, anyone can make a claim and allege wrongdoing -- it's just the investigator's job to determine if there's any actual evidence to support that claim. You don't want to prejudice the investigator against you in some way by going on the offensive needlessly.

3. Review the rules.

Go back over the basics. You may only have a passing familiarity with your obligations and rights under the American Institute of CPAs' policies. Information is power -- and, in this case, it's also your chief mode of protection. If you don't know exactly what's expected of you, you could make some disastrous mistakes as you respond to the allegations.

4. Communicate with the investigator.

Is something not clear in the communications you've received so far? Don't guess. Call the investigator and ask for an explanation of any instructions or questions before you respond. If necessary, you can generally get an extension if you need additional time to work through your answers, but don't delay the request. Talk to the investigator and make it clear that you're fully co-operating and have nothing to hide.

When you answer the investigator's questions, be as thorough as possible and take your time. Your sincere response and attention to detail will also speak toward your general character as a whole -- which can only help your case when you've been accused of an ethics violation.

Source: AICPA, "How To Respond to an Ethics Investigation," accessed June 01, 2018

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