Because you’re a CPA, chances are good that, at some point, your friends and family members will ask you for financial advice, tax tips, or even free services. Lending a helping hand can give you real-life experience and even help your career, but if you’re not careful, your well-meaning assistance could do professional harm. In addition, you may risk overextending yourself or step into thorny relationship tangles with loved ones.
How can you be helpful without stepping over ethical lines or risking a cold shoulder from family members? The first thing to determine is whether you should provide free advice or services. Experts weigh in:
- Assess how it might affect your relationship with the other party. “Getting involved in your family’s business and financials can be super tricky and can create a messy dynamic in relationships,” said Tamera Loerzel, a partner at ConvergenceCoaching LLC in Minneapolis. Before offering advice, Loerzel, who specializes in leadership training for executives in the accounting profession, recommends that you “ask yourself, ‘Can you be objective, and can they hear you being objective?’”
- Determine whether you’re qualified. You may be asked to provide free services for your church, nonprofit, or a family member with a complicated tangle of financial affairs. In these cases, ask yourself whether you will be able to perform these services in compliance with accounting standards even if they are not in your area of expertise, said Ellen Goria, CPA, senior manager–Independence and Special Projects in the Professional Ethics Division at the AICPA.
“Undertake these services only if you can complete them with professional competence,” she said.
If you decide it’s best to turn friends and family down, here’s one way to soften the blow:
- Refer them elsewhere. Richard Ward, CPA, is president and CEO of Capital Configuration, a wealth management company he founded in Pittsburgh in 2014. He has trimmed his pro bono family and friend portfolio down to two clients—his mother and grandmother—because he said he can’t afford to work for free. Ward, a graduate of the AICPA Leadership Academy, tries to steer other family members to competent and affordable colleagues and knows exactly what to say to avoid creating tension.
“I just say ‘I can’t do it, but I can recommend someone I trust to do a good job for you,’” Ward advised. “This way, you can clear your conscience by offering them a workable solution.”
If you do decide to give friends and family some help, there are a few crucial things you should consider first:
- You still owe them your best work. Even if you’re working pro bono, you are still required to provide the service just as you would for a client who pays your standard rate, Goria said.
“Professional standards don’t allow you to perform subpar work just because you are not getting paid in cash,” she said. “You might be paid in cookies or a bottle of wine, but your friend is still your client, and you have a responsibility to perform the service as you would with any regular client.”
- Know the standards. The AICPA’s FAQ on General Ethics Questions presents the organization’s position on pro bono and below-cost work (see page 6).
- Be aware of what your employer will allow you to do. At Richmond, Va., firm WellsColeman, for instance, employees are not allowed to use the firm’s resources for personal profit. As WellsColeman managing partner George D. Forsythe, CPA, noted, “Most CPAs employed by a firm don’t have their own software, and if they use the firm’s software, they may be creating a liability for their firm.” Forsythe suggests offering to help your friends complete their own taxes using software available to the public by explaining the process and being available to answer questions.
When you undertake it carefully, though, free work can add a boost to your business. You never know when your helping hand may convert a pro bono client into a paying customer. Ward appreciates his role of being a go-to person for financial advice and help, and offers cash-strapped friends and acquaintances a discounted rate.
“Helping people can serve as a good marketing tool,” he said. “You never know when they might become successful or cross paths with someone who needs a CPA, and the fact that you helped them might just lead to a referral.”
Teri Saylor is a freelance writer in Raleigh, N.C. To comment on this article, email senior editor Courtney Vien.
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