Professional ethics - ACFE San Diego Chapter

Presented by: Chuck Cochran, CFE
Sponsored by: San Diego Chapter-ACFE
About Your Presenter; That’s Me!
• Licensed Private Investigator since 1982
• Certified Fraud Examiner since 1993
• Researching, studying and instructing in ethics since 1992
• Office Phone: 619-691-6379
• E-mail: [email protected]
Don’t Worry, I Have a Plan
• Understanding the characteristics of a profession and a
Examine the need for professional ethics
Examine the General and the Specific models of
professional ethical codes
Clarify the elements required for a professional ethical
The Quest: Seeking the perfect code of professional
Understanding the Characteristics of
Professions and Professionals
• Traditionally, there are only three recognized professions
• Law, medicine, and the clergy
• These are the only professions with a legally recognized
privileged relationship with clients, patients, and penitents
• This concept of privilege sets attorneys, doctors, and
clergy apart from other “professions”
• What about the rest of us?
I’m a Professional and You’re Not!
• A number of occupations desire recognition as a
• Designation as a profession denotes a certain amount of
trust and prestige
• There is a desire to limit the number of professions to
maintain exclusivity and prestige
• How do we separate professions from vocations?
Characteristics of a Profession
• Has a recognized body of specialized knowledge
• Requires members to demonstrate mastery of that body
of knowledge
• Provides an important service to society
• Services are primarily “white collar” as opposed to “blue
• Bound by a distinctive code of conduct; i.e. ethics
Wait! Something’s Missing
• Continuing professional education (CPE) traditionally has
not been a characteristic of a profession
• The introduction of a CPE requirement for professionals
created some resistance
• More and more professions are requiring CPE credits for
their members
I’m a Professional, Yes I am!
• You might be a professional IF
• You have mastered the knowledge of your profession
• You have demonstrated that mastery in the appropriate
• You maintain that mastery through continuing professional
• You abide by your professions code of ethics
The Need for Professional Ethics
Reasons for Professional Ethics
• Unethical professional conduct can cause more harm to
society than most other occupations
• Communicates the ethical viewpoint of the profession to
• Promotes the values of the profession over personal,
societal, or institutional values
• Don’t forget, society expects a profession to have a code
of ethics
What do We Get Out of It?
• Provides guidance on ethical questions that arise during
the course of professional activity
• Defines relationships with clients, colleagues, and the
• Provides you with a degree of credibility as a member of
the profession
• Offers you a defensible position for your decisions
The General Model for Professional Ethics
Short, Sweet and to the Point?
• The general model provides broad ethical guidelines for
the professional and is easy to write
• This broad approach makes it possible to cover a wide
range of situations
• This brevity limits guidance for proper action in specific
• Additional guidelines may be required to clarify what
constitutes an ethical violation
Examples of a General Model
• Association of Certified Fraud Examiners - Code of Ethics
• California Association of Licensed Investigators - Code of
• American Academy of Forensic Sciences - Code of Ethics
and Conduct
The Specific Model for Professional Ethics
Chapter and Verse
• The specific model is characterized by detailed language
that attempts to cover ethical decisions for a variety of
• However, unusual circumstances may present difficulties
in the application of the code.
• A possible solution is to provide introductory paragraphs
to the code written in more general language
Writing Chapter and Verse
• One of the biggest problems with the specific model is the
long and difficult writing process
• Preparation of a specific code requires a clear
understanding of the duties and responsibilities of the
• A wide range of professional experience is vital in the
preparation of a specific code
• Finally, specific codes are difficult to revise
Examples of Specific Models
• American Bar Association’s Model Rules for Professional
• American Institute of Certified Public Accountants’ Code
of Professional Conduct
• Code of Professional Conduct, Standards and Ethics for
the Investigative Profession, by Kitty Hailey
Elements of a Professional Code of Ethics
Putting Your Code Together
• A code of ethics must derive from mutual agreement
• A code of ethics must be written
• A code of ethics must have some form of dispute
Let’s All Agree to be Good
• Why mutual agreement?
• No one can be forced to abide by a code of ethics
• Adherence to an ethical code maybe required to maintain
employment, professional standing, or group membership
• Ethical codes receive authority and acceptance by
consent of those governed
Put it in Writing
• To be effective, an ethical code must be written
• Unwritten codes lead to ambiguity, confusion and possible
• A written code clarifies and defines the behavior expected
of a professional
• A written code provides transparency and increases
confidence in the profession
Resolving Disputes
• A critical part of a code of ethics is a process for resolving
allegations of ethical violations
There must be a clear procedure for receiving and
investigating all allegations
A process for a hearing that allows the participation of all
interested parties is essential
A review of the investigation and the hearing is needed to
determine the validity of the complaint
An appeals process must be available if a violation did
Actions Have Consequences
• If an ethical violation has been found, sanctions are
necessary to maintain the validity of the code of ethics
• The code of ethics must clearly state what sanctions may
be imposed and under what circumstances
• Sanctions may include reprimand, suspension, or
• Serious violations may be referred to legal authorities for
prosecution or other legal sanctions
Public or Private?
• The question about whether to make any part of the
dispute process public is a difficult one
• A lack of openness may damage public confidence in the
• Going public may inhibit colleagues from making
complaints for fear of repercussions from other colleagues
• There may be a desire not to embarrass a colleague over
a trivial, but not insignificant, violation
Go Public, Go to Court?
• Going public with a dispute may involve the organization
in a lawsuit
• Generally, courts are reluctant to interfere with matters of
internal discipline
• However, the possibility of legal action by a professional
colleague facing disciplinary actions can’t be ignored
• An important part of a legal defense is a fair and objective
process to resolve all allegations
Final Note on Privacy
• Three can keep a secret, if two of
them are dead. Benjamin Franklin
The Quest for a Perfect Code of Professional
Ain’t Going to Happen
• There will never be a “perfect” code of professional ethics
• Regardless of the care, effort, and thought put into the
development of a professional code, there will be critics
• Some criticism will be thoughtful and constructive and
should be given serious consideration
• Other criticism will appear to have no purpose other than
to belittle the effort and effectiveness of the code
Give It the Old College Try!
• Focus on creating a “more perfect” code of ethics
• Regardless of the model used for the code, the language
should be clear and concise
• Authors of the code should have a wide range of
experience in the profession
• Should be periodic reviews and revisions of the code for
clarifications and adaption to changing technology
A Final Thought
Never, never, never give up.
Winston Churchill

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