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Not scared to snitch: whistleblowing advice for accountants

Author: Peter Taylor-Whiffen

Published: 23 Jan 2020

How does a safe whistleblowing culture benefit accounting firms? Elizabeth Richards, Head of Corporate Governance at ICAEW, examines the circumstances in which accountants might need to blow the whistle and the legal protections they receive.

We learn from an early age that no one likes a snitch and telling tales out of school wins you no friends. It can therefore be a challenge to upend our core ingrained values and accept that reporting malpractice actually does show bravery, loyalty and a desire to improve an entire organisation.

Whistleblowing is essential in upholding and protecting a company’s reputation – and that of accountancy as a whole. If we see something we think brings discredit to our profession, we have a duty to report it. If it’s a criminal act, that duty can become a legal obligation.

Let’s be clear: blowing the whistle is absolutely not about "telling tales" or personal grievance – those are completely different. Whistleblowing is about confidentially raising concerns of danger, risk, malpractice or wrongdoing.

Circumstances requiring accountants to speak up would most commonly include strong suspicions of fraud, theft, bribery, tax evasion, money laundering and data protection, but could also cover more general wrongdoing around health and safety or environmental protection, among other things.

The anonymity of whistleblowing, and often the external investigation that follows, gives practices an opportunity to receive raw feedback untainted by self-interest and unfiltered by management. Most whistleblowers act with the best of intentions to improve their organisation. Those who raise concerns by following the appropriate procedures are assured protection from any resulting dismissal or victimisation by the Public Interest Disclosure Act.

Often there is a legal obligation to report suspected wrongdoing, but where there is not, accountants can often be conflicted about respecting client confidentiality vs acting in the public interest. ICAEW’s new Code of Ethics, which came into force on 1 January and includes guidelines on ‘Non-Compliance with Laws and Regulations’, offers advice on when you can breach confidentiality and the specific steps to take.

Whether in practice or in business, all accountants should expect to be able to report suspected wrongdoing without recrimination. Many organisations have sound internal whistleblowing procedures – several of which enhance their integrity further by referring such reports to external investigation.

A solid whistleblowing policy makes it safe for anyone to report misconduct confidentially and without fear of repercussion. Whistleblowing enables companies to take stock and learn difficult lessons; it empowers employees and makes them feel valued and listened to. A sound policy inspires confidence not just in your employees, but in your clients and the accountancy profession as a whole.

If you would like advice on a whistleblowing issue contact the ICAEW’s Ethics Advisory Service on +44 (0)1908 248 250 or via webchat. UK members can also contact the charity Protect (formerly Public Concern At Work) on +44 (0)20 3117 2520 or visit its website for clarification on disclosure protection under the Public Interest Disclosure Act.