Accountants on the financial abuse frontier

Speaking with Accountants Daily, Dianne Hanna, an accountant with over 25 years of experience, told the brand that “it’s not the accountant per se that this consultation is looking at, it’s more the tax agent that’s considered as the tax intermediary put in this position of privilege”.

Hanna noted that the consultation is crucial to develop a system that protects vulnerable taxpayers from tax agents who do harm or partake in.

“The cynic in me says, as long as there are people [who] want to do the wrong thing, there’s always going to be avenues for people to do the wrong thing; which then means that we who are trying to do the right thing need to be more vigilant in protecting that,” Hanna said.

“How do we ensure that people put in roles of privilege and responsibility to safeguard the interests of vulnerable people – how do we hold them accountable when they don’t [play that protective role]?”

While the consultation paper proposes remedies for the vulnerable taxpayer once harm was done, Hanna stressed that it is important for those on the financial abuse frontier – accountants and tax agents to play a role to prevent harm from occurring in the first place.

More than just a checklist

Hanna said the conversation is now shifting to the importance of consent and ensuring that practitioners gain authorisation from their clients before they act on their behalf.

“We want to make sure they’re consenting to whatever we’re suggesting – so if we’re saying this is a course of action we are wanting to take, [you should ask]: ‘Are you happy with that?’,” Hanna said.

“You should always ensure that the return is signed by the person and they are giving you that authorisation. You should never lodge without their informed consent.”

Assistant Minister for Social Services and the Prevention of Family Violence, Ged Kearney, said: “Harm often doesn’t end when someone leaves a violent relationship, and financial abuse can follow victim-survivors for a lifetime through debt, damaged credit, lost savings and superannuation, housing insecurity and the enormous task of rebuilding financial independence.  

“No government system should ever become another tool in an abuser’s toolkit. We have a responsibility to make sure our systems are safe, accessible and cannot be weaponised to cause further harm.”

The dominant partner

For Hanna, a tricky situation that accountants can face, which can also become an awkward one, is when the lines of consent start to blur.

“Sometimes when you’re in a meeting, the husband and wife might both be there, but you might notice that one of them is quite dominant, and the other one is quite passive. How do you navigate that?” Hanna said.

“For some people, understanding that a spouse might not have their partner’s best interest in mind, that’s something that they don’t know how to challenge. So having them challenge that becomes important.”

“You might have a follow-up phone call to say, ‘Oh, I  know you couldn’t come this week to the meeting’, or ‘just confirming you’ve received the return and you didn’t have any questions, because if you do, you can always reach out to clarify anything before you sign’. It can be that simple so that it doesn’t become awkward or cause further harm.”

Ethical dilemmas

While ethics come into question when tackling financial abuse, the accountant said that this consultation may introduce a greater compliance burden on the profession.

“The burden is that we’re not psychologists, we’re not counsellors, we’re not the court determining what abuse is,” Hanna said.

“I do think as a responsible citizen I have a role, but I can understand some frustrations with accountants because they’re like, how am I equipped to do this, how am I equipped to navigate that ambiguity that can exist.”

“I might be looking at it from my perspective of: I just want systems to run efficiently; I don’t want to have another checklist that I got to complete; I don’t want to have more obstacles for me getting access as opposed to, pausing and thinking, ‘hang on a second, who does this checklist protect? Who does this obstacle that has been put in my way protect?”

As checklists play an important role in compliance in certain situations, Hanna stressed that for financial abuse, a more thorough and case-by-case approach should be taken to prevent harm.

“If we saw them signing the spouse’s tax return, do I need to report that as a suspicious matter? For accountants, it would be helpful to get guidance on that, and look at some of those real-life case studies that do come about, and for accountants not to be shy, but ask, ‘I’ve seen this happen, what should I do?’” Hanna said.

“I appreciate a checklist because it gives me an awareness of what I need to be conscious of, but then I also need to be able to respond to very subjective situations as they unfold.”

“If we looked at it from the checklists and just followed checklists, then I’d say we wouldn’t be playing the role that we may need to play to stop financial abuse.”

For Hanna, the role of accountants is crucial as the profession exists on the front line in protecting against financial abuse.

“You’ve got to be present in discussions and in meetings and have some kind of awareness,” Hanna said.

“As accountants, we can find ourselves in situations we are not equipped to deal with and are outside of what we have traditionally seen as our remit. The growing workload and constant changes in regulations also [have] an effect, and if a ‘red flag’ (which can be subjective) was seen, not knowing or being connected with trusted pathways or a network to navigate and refer this through adds to the complexity for accountants to navigate.“

“I think over 95 per cent of companies’ and trusts’, tax returns are lodged by tax agents. You could say that there’s a large amount that’s going through that system, so accountants could have a role to play in making the system safer.”

Consultation open for submissions until 27 October