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What Are Bookkeeping Ethics?

The bookkeeper has a responsible position in society. She tracks the flow of monies that come into and go out of companies and businesses. The work of a bookkeeper is necessary so that interested parties can understand the financial status of the business at a glance. A bookkeeper is a powerful person and must work to the highest ethical standards. The role of the bookkeeper could also involve working on a company’s tax obligations and so there is often a legal aspect to doing the job. If you work in payroll as part of your bookkeeping role you also have a huge responsibility to organise people’s wages and therefore livelihoods. If you create invoices and organise paying the bills then you will understand that you need to be honest, up-to-date, accurate and quick to spot mistakes and put them right if you are to be an ethical bookkeeper.

Bookkeeping ethics are all about truthfulness, being careful and diligent in all you do, not just in your bookkeeping.  A bookkeeper has a trusted and respected role. There are bodies such as the International Association of Bookkeepers (IAB) and the Institute of Certified Bookkeepers (ICB) which state what behaviours are appropriate for bookkeepers. These behaviours are listed below along with generally recognised appropriate actions that bookkeepers will need to take in order to uphold the good name of the profession.

When you are a bookkeeper you will need to conduct yourself according to the rules and ethos of the professional body to which you belong or the company which employs you.

Bookkeepers should at all times only engage in activities which will not bring themselves or their peers or employers etc, into disrepute. For instance committing any criminal offence (maybe apart from some road traffic offences) would usually be enough to get the member struck off the official list of practitioners. It may tarnish the good name or reputation of the institution or the company the bookkeeper works for and is considered very serious. So being a good bookkeeper means behaving appropriately in your private as well as your professional life.

Bookkeepers should only ever be honest and scrupulous in their dealings. For instance members of the IAB and ICB are not allowed to engage in dishonest activities even if they’re unaware, which means due diligence in taking on clients is of the utmost importance (especially important with internationally recognised anti money laundering legislation). Also members of any professional organisation must always adhere to their strictly professional standards and are not permitted to ‘cover up’ any illegal or corrupt procedures, even if this would mean upsetting the business relationship with a client.

As an ethical bookkeeper you would never take on any work that you know you could not complete for whatever reason (e.g. if you might run out of time and be unable to finish  the job). An ethical bookkeeper only takes on tasks that they can do and are qualified to do. As a bookkeeper you have a duty to protect the client’s information (save in a criminal case where you might be required to pass on details). The ethical bookkeeper has a duty of care over the files and documents they are checking, creating and logging. Files, documents and receipts/paper trails of the employer or client must be securely held at all times. Digital files should be encrypted as should digital copies of those files. Physical data should be stored in locked areas and access strictly controlled to safeguard all parties from theft or the disclosure of sensitive company data. The role of the bookkeeper goes far beyond the mathematical aspects of data creation.

Bookkeepers should only ever keep accounts that accurately reflect the reality of the business they are keeping the records for. They are in a trusted position and need to be clear and concise about the trading activities of the company. A bookkeeper will at all times need to be polite and courteous and any advice or information imparted to clients should be right and also easy to understand.

The ethical code of the bookkeeper also ensures that he or she would always disclose if they had an interest in the work they were employed to do. In this way they protect themselves and their company from potential charges of not working in clients’ best interests.

If you are a member of a professional body as part of your bookkeeping practice your subscriptions should be up to date and any CPD required should be recorded and logged for future reference. Insurances should be promptly paid and in line with your work activities. You would also need to update your employer or professional institution with any changes in your situation such as a house move.

A bookkeeper should follow company procedures. He should be loyal, keeping financial matters confidential. He should make sure the accounts are in a safe pair of hands. If in doubt he should check with his manager. A bookkeeper has a responsibility to report if he is asked to do something he doesn’t think is ethical. He could speak to his manager or someone in the company who deals with such complaints.

In answer to the question ‘what are bookkeeping ethics’ we have covered personal responsibility as well as having a regard for the business which we are employed by. If you work for yourself and are your own bookkeeper you need to be just as rigorous as if you were working in a large company. The basic rules are straightforward. Report accurately what your business is doing. Liaise with the relevant departments or legal entities if you need further support or information and if you make a mistake rectify it transparently and as quickly as you can. The ethical bookkeeper will store sensitive information securely and only pass on data to relevant third parties as and when and according to the local legal system. A bookkeeper has a duty to do the right thing and take steps to put things right when something goes wrong (which does happen). The bottom line is that the bookkeeper is honest and accurate. Everything else will follow from working to this basic ethos.

Quentin Pain

Quentin Pain helps people thinking of starting a business and those already in business achieve success via his marketing company ProofMEDIA. He's also the creator of Accounting for Everyone, a published author. and a Fellow of the Chartered Institute of Marketing. Visit ProofMEDIA.uk to find out more.

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