The Maltese Accountant’s Role in Safeguarding Malta’s Reputation

Despite the sophistication of our laws and the seriousness of our authorities it is occasionally claimed that Malta may harbour businesses of an undesirable nature or for undesirable purposes such as evasion of tax.

The accountant is normally one of the first professionals engaged or consulted to assist foreign businesses or entrepreneurs with the set-up of a business in Malta from where such businesses purport to carry out their international activities.

Accountants, like others operating in the business world, are faced with many ethical dilemmas, some of which are complex and difficult to resolve. This is an opportunity for the Maltese accountant to demonstrate a strong sense of ethics in the conduct of his profession. It is an opportunity to bring out our competence, knowledge, character as well as to resort to our ethical toolbox which contains national, the profession’s and our networks’ tools for the proper conduct of our business. One of the elements that many believe distinguishes a profession from other occupations is the acceptance by its members of a responsibility for the interests of those it serves. A high standard of ethical behaviour is expected of those engaged in a profession and this ethical toolbox, if properly used and applied, will safeguard the hard-earned reputation of our country as a global player in matters related to business and financial services as well as the country’s competitiveness. We have a very ethically equipped tool box indeed. We also have sufficiently trained professionals to utilise those tools with mastery. What remain are the will and determination of accountants to use the right tools at right time.

To begin with, the first opportunity to apply our ethical training is when we are approached by a potential client for assistance with their plans of setting up shop in Malta. Here the accountant is expected to make every effort to understand the client, take all steps to understand the business, obtain the necessary references, enquire about the past of the client, his reputation and last but not least clearly understand the reason and motives as to why the client wishes to do business from Malta. The accountant at this point resorts to the client acceptance tools and ascertains that national laws and the profession’s standards relating to this phase of client relations are applied diligently and without compromises. At this stage the accountant is expected to demonstrate the courage and presence of mind to challenge and ask all the necessary questions. It would also be in the interest of the perspective client to ensure that he is embarking on a rewarding route.

As time rolls by and the relationship begins to age, the accountant does not sit on his laurels and merely rely on the original client acceptance procedures but assesses whether the original impressions remain valid or whether any diversion from the original plan or material changes have surfaced. In the event of such a change in plans, the accountant would question what the client’s real long-term intentions were. At this point, depending on the documented assessment, the accountant would make a decision as to whether or not to continue serving the client or seek to end the relationship.

Our local code of ethics requires the accountant to ascertain whether he is indeed competent to service the client and meet his particular needs. The accountant would always assess his readiness and skills to successfully assist the client. Here the accountant would need to make a decision as to whether or not he possesses all the skills that are necessary to assist the client or whether he needs to engage the help of a specialist to bridge the skills gap that might arise. He would not accept to provide professional services in which he lacks skills, expertise, experience and training. Accountants have to wade through an infinite pool of such issues and will be continuously in need of authoritative guidance and assistance. This is available, and standards like IFAC’s Code of Ethics for Accountants will continue to flourish. As regards knowledge and competence it falls upon the accountant to ensure that he keeps himself continuously informed and in Malta, thankfully we are blessed with a wide range of resources to avail ourselves of.

Clients are not there only for fees. The accountant has positioned himself conspicuously with his client, as a trusted advisor. Therefore it falls upon the accountant to ascertain that he continuously merits the tag of a trusted advisor. Accountants should not be indifferent to this and they would always manage client relations in the full understanding that clients need us to assist them in complex issues beyond their core needs. Accordingly the accountant would never be content with successfully providing the basic services which after all the client can obtain without resorting to expensive professionals.

The client has a variety of needs for which he would resort to his accountant for resolution. The client is only interested in his needs and therefore it is up to the individual professional accountant to identity potential self-review threats, conflicts of interest and scoping breaches. Every accountant experiences the thrill of being asked for services. Every accountant is however clearly aware of the voluminous rules and regulations, not to mention laws regulating the instinct of being a one-stop shop for our clients. We, especially in Malta, are accustomed to the idea of ‘my client’ who should always be loyal to us forever. It is symptomatic of modern times that professional service providers have to share their clients with fellow firms or professionals. Every accountant should be open to this evolving culture. Every accountant should avert threats to his livelihood emanating from this, by always uplifting the service levels and quality thereof and approach the reality with an open mind discarding unnecessary and unwarranted emotions.

Honesty and integrity are two major characteristics of the ethical accountant. It is not unheard of for accountants to adopt and sell the concept of ‘Chinese Walls’ to circumvent scoping or conflict dilemmas. At this point the accountant would ask himself ‘why do I have to build Chinese Walls?’ and ‘Is it because I genuinely believe that these proverbial walls are insurmountable?’ ‘Is it because it is definitely in the interest of the client?’ ‘Or is it to safeguard my hold over the client and secure more fees?’ The conscience comes in here and open mindedness and a strong sense of ethical professionalism should take charge. The accountant knows that it is not enough to be seen to be independent but also to be authentically independent.

Correct ethical behaviour by Maltese accountant does not only safeguard Malta’s reputation as a serious jurisdiction. It would project the Maltese profession as a contributor to the universal good of the profession. If a Maltese accountant assists a client to set up in Malta in the most efficient manner only to help the client avoid his country’s legal requirements, then what the profession gains on the swings it loses on the roundabouts. The Maltese accountant has a global perspective and is fully aware of his role of advancing global business rather than protectionist attitudes. If say a client is better off setting up a business in Malta than say Switzerland this has to be for solid reasons of substance. This is also what the Maltese authorities seek when processing applications from foreign investors in our country such as by refusing to register brass plate companies.

In accounting, ethics and integrity standards are based on a broad commitment to honesty, impartiality and objectivity. Accountants should apply all their ethical tools to ascertain this and serve as good gatekeepers for our little island and beleaguered profession.

0.00 avg. rating (0% score) - 0 votes