Whether in appreciation for a job well done or a celebration of a traditional holiday, ample opportunities exist for accountants to receive gifts from clients.
While there are few accountants who don't enjoy unwrapping presents, all professionals must be careful to ensure that acceptance of a gift doesn't in any way impair their judgment or violate professional standards. Knowing the rules related to accepting gifts can keep you and your clients out of hot water.
Laws and guidance on what constitutes bribery ranges from country to country, culture to culture and company to company, but the ACCA rules of Professional Conduct require that auditors are independent and that they are seen to be independent at all times.
Countries including Singapore have hard and fast rules on this issue and a belief drummed into executives due to the city state's rule-based education and business practices.
But many other countries including China, India and Russia feature a broad variety of different local cultures and values. They rely on rules that are often implicit and cannot be coded or written down because the exercising of these rules depends on local circumstances. These include the level of familiarity between the parties involved, the rank of the local partner in the hierarchy, local customs and culture, as well as local laws and political institutions.
As a rule of thumb, the difference between what constitutes a gift and what constitutes bribery hinges on several major issues. These include the nature of the gift and whether you continue to represent the client who has presented the gift.
If your work with a client has ended, then it is fair to say that a small gift given in gratitude is acceptable. The gift should be modest, it should not be money or a voucher, nor should the gift be such that it would bring your independence into question.
Any gift that is not modest, or is of great value, or is disproportionate to the work that has been done should be returned to the client with a note of thanks and a short explanation that you couldn’t accept such a gift.
Another factor to carefully consider is whether an item is a gift or can be labelled as entertainment in order to determine the rules related to the item. Gifts differ from entertainment on the basis of joint participation. Receiving tickets to a football match would be considered a gift. However, an accountant attending a baseball game with a client, regardless of who purchased the tickets, would be deemed as entertainment.
In order to understand the specifics of the issue it is always important to understand the norms and regulations of the home country as relative rather than the absolute is the first step towards a better understanding of local practices.
If in doubt, it is always advisable to adopt a conservative, gradual and risk-averse approach in order to manage these relationships.