Is it Safe to Talk After You Walk?

by Laura Hay, CPA, CAE – April 19, 2017
Is it Safe to Talk After You Walk?

Making the decision to leave an employment situation in the face of unethical activity can be difficult on its own. But how do you address that separation with prospective future employers?

The First Question

Financial professionals are accustomed to having to consult various rules that affect decisions, including outside consultation with other professionals. However, when encountering an ethical issue, “you feel like an island,” noted an Ohio Society of CPAs member who decided to leave an employment situation after being asked to record transactions that did not comply with professional standards. Concerns about confidentiality requirements, liability, reputation, personal and family well-being initially drive a person to introspection:

  • How serious is this, really? 
  • Am I overreacting? 
  • How are others going to perceive this situation after the fact? 
  • Is this a business decision or an ethical one?

"I scoured my brain and the ethics rules, trying to determine is this or isn't this my responsibility," the member said. "I felt that confidentiality requirements precluded me from talking with outside CPAs, and my attorney had other affiliations with the business. It was a complex situation.” Ultimately in this instance, an independent attorney recommended that the member depart the company to protect his license and livelihood.

It's Not Over

“Throughout this process, one consideration always led to two or three others,” said the member. “As my course of action became clear, my expectation was that this would lead to a several-year career setback. It was a sudden separation – I didn’t have a ready safety net and I was concerned that the nature of my separation would be an issue for future employers. Would I be seen as a tattletale? I second-guessed how serious the issue had been and continued to struggle with the confidentiality issues.”

What Can You Say to Prospective Employers?

“In defense of my own integrity, I wanted to say that I left my employer because I had been asked to record a transaction that would be a violation of professional standards, and that I had refused,” said the member. “But in my industry, this would have significant reputational impact and a risk of the story gaining a life of its own. It’s hard to talk vaguely about why you left an employer.”

“As a result, there was a period where I kind of limped along until I reestablished myself as a professional. It was my professional relationships that salvaged my situation, and the respect that I retained at all times within my network.”

What Do the Ethics Rules Say?

The AICPA Code of Professional Conduct, Section 2.400.070, “Confidential Information Obtained From Employment or Volunteer Activities,” states that:

.01 A member should maintain the confidentiality of his or her employer’s confidential information and should not use or disclose any confidential employer information obtained as a result of an employment relationship.

.02 For purposes of this interpretation, confidential employer information is any proprietary information pertaining to the employer…that is not known to be available to the public and is obtained as a result of such relationships.

.05 A member would be considered in violation of the “Acts Discreditable Rule” [2.400.001] if the member discloses or uses any confidential employer information acquired as a result of employment or volunteer relationships without the proper authority or specific consent of the employer…unless there is a legal or professional responsibility to use or disclose such information.

.07 In deciding whether to disclose confidential employer information, relevant factors to consider include the following:

  1. Whether all the relevant information is known and substantiated to the extent that it is practicable. When the situation involves unsubstantiated facts, incomplete information, or unsubstantiated conclusions, the member should use professional judgment in determining the type of disclosure to be made, if any.
  2. Whether the parties to whom the communication might be addressed are appropriate recipients.

The professional should consult her employment contract and attorney to determine whether there are legal requirements regarding disclosure of the reason for their separation. However, even if there is a legal requirement for disclosure, an employment interview is unlikely to be the venue for carrying out that responsibility. So any disclosure made in the interview would likely be viewed as an unauthorized disclosure if consent was not granted or legally required, and if the matter being disclosed was not available to the public.

Doesn't This Make it Harder to "Do The Right Thing?"

“I’ve found that it’s easier to say no after my experience,” noted the member. “I have a new perspective now and know a little better what my professional responsibilities are and what’s on the line. I know that it’s my job to say ‘I don’t care what you say – we’re doing it this way.'”

Reprinted with permission of the Ohio Society of CPAs