As a Certified General Accountant (CGA), ethics are a fundamental requirement. CGAs affect the welfare of their clients and also the wider stakeholder-society. It is crucial to work in accordance with the six CGA Canada Code of Ethical Principles. Fraud and negligence do occur however and they have negative implications on the professional, the client, the professional body, and society as a whole. For example, in the case of Kelley Lynch, she was trusted by her client, Leonard Cohen, to work responsibly as his business manager (Malemed).
Unfortunately, her activities can be analyzed to demonstrate how she failed to act responsibly and directly violated three ethical principles. Lynch violated the ethical principle of Trust and Duties. As a professional accountant, Lynch failed to honour the trust that her client bestowed upon her and used her privileged position as business manager to cater to her own needs. For example, Lynch conspired with Richard Westin to hire him as Cohen’s tax lawyer in order to cater to her self-interest With Westin’s help, they devised a complex corporate structure as a vehicle for retirement savings.
Taking advantage of her privilege to access Cohen’s finances, she stole over $50 million. Another key violation is that she failed to remain independent in mind and appearance, as she was once in a personal relationship with Cohen (Malemed). * * Lynch also violated the principle of Responsibilities to Society. She failed to uphold to responsibilities to society, which include acting with trustworthiness, integrity and objectivity.
She failed to display these characteristics in her own actions and in her dealings with her colleague, Westin, while serving her client. For example, Lynch is entitled to 15% management compensation, however she broke Cohen’s trust by stealing more than $5 million of his savings, which is greater than her defined compensation amount. She failed to act with integrity and objectivity, when her client took time off from his career. She used this opportunity to receive more royalties through the scheme that Westin helped to develop (Malemed).
* * Lynch also directly violated the principle of Deceptive Information. As a professional accountant, Lynch failed to not be associated with information that is false or misleading. With Westin’s help, Lynch pretended to sell Cohen’s music-publishing company and royalty for $12 million. Lynch falsely stated to Cohen that the money from the sale would go to a company owned by his children, but instead it went to a company almost owned entirely by Lynch (Malemed).
* * In conclusion, Lynch failed to act responsibly with handling the finances of her client, Cohen and directly violated at least three of the six ethical principles. This is just one incident of fraud and negligence that has occurred in professional accounting bodies. Therefore, to maintain the integrity and respect of the CGA profession, it is crucial that members always act in accordance with the CGA Canada Code of Ethical Principles.