Applying a Code of Professional Standards in the Real World — Standard of Objectivity and the Investigative Process
By Leah Wietholter, MBA, CFE, PI
Most professions have a defined code of professional conduct or standards to help guide decisions and to safeguard the public they serve. Accountants, auditors, and fraud examiners are no exception. One of the standards in the code of professional conduct we observe is the standard of objectivity. Regarding this standard, the AICPA states, “Under the AICPA Code of Professional Conduct, in the performance of any professional service, a member must maintain objectivity and integrity, shall be free of conflicts of interest, and shall not knowingly misrepresent facts*.”
Practical Applications of Objectivity
In reading professional standards, I like to ask myself, “What does this look like in the real world?” Objectivity in my everyday life first involves conflict checks on new cases. My team and I must ask ourselves if the professional services we’re asked to provide will be impaired by relationships of those involved in the case. Objectivity also implies that I am advising from outside of the situation so I can provide opinions, facts, and guidance from a third-party perspective. As a professional who testifies as an expert, this is key to the reliability and trustworthiness of my findings, opinions, reports, and testimony. The last part of the AICPA’s statement emphasizes the necessity of representing facts accurately, which really should go without saying for any professional.
Objectivity in Investigations
When it comes to the application of objectivity in investigations, a reliable foundation is the use of an investigative process and a practice of relying on best evidence at each step. Remaining objective in a case that is full of emotion can be tough, but if you can stick to your process and best evidence, you’re going to be a reliable expert and professional who is best able to help your clients.
The Investigative Process
Based on your experience, your investigative process might look different from the flowchart below, but the important thing is that you have one. A process based on best evidence will help keep you out of the weeds and provide services as an objective, third-party professional. Let’s walk through a few highlights of the Workman Forensics investigative process.
Since we have a data-focused, or “data sleuth”, approach to investigations, I want to make sure that from the beginning my team and I are gathering data from the most reliable source with the least likelihood of having been influenced by the subject of the investigation and his/her scheme.
When we gather data, we want to obtain the records from independent third parties when possible. If you’ve listened to any of our podcasts or webinars, you know that we always start with bank and credit card statements—preferably obtained directly from the financial institution.
The goal of data analysis in an investigation is to look at everything and then to efficiently narrow down the transactions to those that are suspect and need further investigation. This approach allows us to be unbiased as we’re not relying on random samples or what people have told us. My favorite example of the effectiveness of this strategy is the case where we discovered that a whistleblower had actually participated in the embezzlement! She only became the whistleblower when the co-conspirators cut her out of the scheme.
When possible, and after the data has been analyzed, we give the subject an opportunity to discuss the findings.
The last two steps of our process connect the dots between our reliable, best evidence sources to determine the loss to the victim and communicate the loss to clients, attorneys, judges, juries, law enforcement, and insurance companies.
Does your investigative process resemble ours at all? We’d love to hear about it! Send an email to creative@workmanforensics.com or leave us a comment below.
* American Institute of CPAs. “Objectivity, Integrity and Disclosure.” AICPA, AICPA, 2020, www.aicpa.org/interestareas/personalfinancialplanning/resources/practicecenter/professionalresponsibilities/objectivityintegritydisclosure.html.