Ethics are essential to all accountants. Do you think each following person is acting morally and in accordance with professional ethics?
(a) A registered tax agent uses legitimate tax planning to allow a high-income earning business owner to only pay as much tax as a salary earner on a much lower income.
(b) A registered tax agent prepares the accounts and tax returns of a client. Unknown to the client, the tax agent’s sister runs a competing business, but the tax agent feels that due to their own honesty, they can keep the client’s affairs confidential.
There is never any single answer to moral questions, as different people have varying opinions on what is ‘right’ and ‘wrong’.
(a) Whether this is moral very much depends on the perspective of the individual regarding the role of taxation and government, and the relative tax burden different members of society should bear. From a professional ethics point of view, minimising tax in a legal manner is perfectly professionally ethical.
(b) Although the tax agent here might feel that they are doing nothing wrong and acting in a moral manner, there is a potential professional ethics issue here given the potential conflict of interest. The agent owes a duty to the client to avoid such conflicts and should find a way to either disclose the conflict to the client and get the client to consent to its presence, or not undertake the work for that client.