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Ethical considerations for providing professional services online.

An accounting firm expanding on the Internet will likely explore several different strategies. They range from offering only selected accounting services, to providing a complete line of the firm's services to clients online. Alternatively, a firm may simply want clients to be able to receive information from the firm's website. In between these extremes fall such activities as marketing, instruction, referral, and chat-rooms or bulletin boards.

Providing services online enables practitioners to serve customers remotely; however, it also creates the potential for both intentional and inadvertent abuse. Only limited regulatory or professional standards specifically address online service providers. In addition, most professional codes of conduct fail to address Internet delivery of services. As a result, CPAs are left with little ethical guidance when problems unique to the Internet arise. Professionals may not be fully aware of the ethical issues that could arise or how their codes apply on the Internet.

One place to start is with the guidelines adopted by the medical and counseling professions that specifically address Internet practice. The following sections identify differences occurring in an online service environment, discuss ethical issues raised, and propose guidelines for an online code of ethics for business and financial professionals.

Online Professional Service Environment

The host of benefits accompanying Internet service delivery motivates an increasing number of firms to join the ranks of those providing online services. Benefits include easy access to an expanded group of potential customers at relatively low cost, potential time-savings for service providers as well as customers, and the ability to offer uniquely web-based services.


However, validity, security, access, and communications problems arise. On the Internet, clients find it difficult to evaluate professional qualifications and the validity and quality of the service provided. Consider the recent cases involving 15-year-olds providing legal and investing advice (i.e., Jonathan Lebed's manipulation of the stock market and Marcus Arnold's dispensing of legal advice under the online handle "LawGuyl975." See "Faking It," by Michael Lewis, New York Times Magazine, July 15, 2001). Security problems arise and confidential information may be exposed or stolen (e.g., H&R Block's embarrassment in 2000 when its online filing service revealed prior filers' complete tax information).

Ease of access may lead to misunderstandings about availability and response time. Because the Internet is open around the clock, clients may expect immediate responses from professional service providers. Internet interactions also carry the potential for serious misunderstandings. Face-to-face meetings enable participants to gather nonverbal, visual, and auditory clues that enhance communication and reduce confusion. Communication problems may also result from an inability on the part of the professional or the client to use or understand technology. As a result, Internet-based service differs from that based in traditional settings. Practitioners providing services online must ensure that their company's code of ethics addresses these differences.

Ethical Issues

While the Internet's rapid expansion has enabled an equally rapid expansion of web-based professional services, it has not been matched by the consideration and understanding of the related ethical implications. The growth of new opportunities is accompanied by equal, if not greater, growth in ethical issues for businesses seeking to expand their offerings via the Internet. These issues include the quality of services and information, privacy and security, nature of relationship, forms of delivery, contractual considerations, and regulation and enforcement.

Quality of services and information. Providing services via the Internet raises questions about the validity of the advice offered by the professional. For example: Is such advice valid? Is the recipient able to evaluate the quality of the advice received? Alternatively, is the information provided by the client valid? Does an obligation exist on the part of the professional to verify the information received from Internet clients?

The propriety of services offered via the Internet raises other questions: Would the services be better provided in a one-on-one setting? Should online service providers be required to make clients aware that better services might be provided in a personal, one-on-one meeting because of the increased knowledge-sharing that would result?

Does Internet communication prevent or hamper awareness of location-specific factors, events, or cultural issues that may result in inappropriate service, such as the failure to consider local tax consequences due to a lack of knowledge regarding the client's location?

Does a business that offers information on a website for educational or other purposes bear a responsibility to ensure the quality of the information? Does an obligation exist to update the information? What responsibilities exist for information obtained from other sources, such as hyperlinks? Do the sources of all information need to be appropriately referenced?

Privacy and security. When information is collected from the client, what degree of responsibility exists to protect client identity and information? Does offering services via the Internet require expanded levels and forms of security? Security breaches, and thus confidentiality breaches, can occur during data transmission from the client, as well as when information is stored on the professional's computer.

Nature of relationship. It might become necessary to determine when a professional Internet relationship begins or ends. Kirsti A. Dyer ("Ethical Challenges of Medicine and Health on the Internet," Journal of Medical Internet Research, 2001, noted, "Case law has not yet determined at what point ... the relationship begins, when the only contact is ... online."

The 24/7 availability of the Internet may result in clients expecting service around the clock. It is important to clearly identify the online "business hours" in terms understandable to all potential clients.

When the website hosts discussions or chatrooms, how much responsibility does the website owner have for monitoring the activity? Is the "host" responsible for removing offensive remarks?

Forms of delivery. Because professional services may be rendered online in a variety of formats, should each format be evaluated separately using a different ethical framework? Many different technologies are used in service delivery, including e-mail, Listservs, interactive websites, and virtual reality programs. The characteristics of each technology differ in terms of their impact on the professional's ability to offer and provide services.

Contractual considerations. The legal requirements for providing services via the Internet may not yet be fully established because they--and the online service delivery mechanism--have to evolve. For example, what responsibilities exist to protect clients who contract for or receive services online? What should professionals do to protect themselves when providing services via the Internet? What steps would ensure that the client was adequately informed, such as disclaimers or competence indicators?

Also, what ethical issues arise when the services and information are provided at no cost versus in exchange for a fee? According to Alfred P. Carlton, Jr. (Testimony Before the Federal Trade Commission at Public Hearing on Possible Anticompetitive Efforts to Restrict Competition on the Internet, October 9, 2002,, the question is how to differentiate legal information from legal advice. Legal advice can be provided only by a licensed attorney, but can legal information be provided by someone who is not a lawyer? He noted that being able to adequately define the practice of law was needed in order to identify improper practice, and that "this is particularly important with the delivery of legal services via the Internet because of the proliferation of entities that provide people with legal assistance online."

Regulation and enforcement. When licensed and certified professionals follow stated principles, are they applicable when providing services online? Will online service delivery be governed by the same standards found in other settings, or will they differ?

Is the professional's competence adequately and truthfully communicated by the website? If licenses or credentials are required for the off-line provision of services, should the same requirements be established for online delivery?

Is the service provided by the professional limited to a particular state or country? Does the website clearly note such limitations so potential clients are fully advised?

What remedies are available if the client is dissatisfied with the services provided? Should data be provided on the quality of the professionals and their business practice and services?

Do requirements exist for the maintenance of records, and do they address the form of the records as well as the length of time that they must be maintained?

These issues can have far-reaching and potentially crippling consequences for uninformed online business providers. To help ensure that they are adequately addressed, the authors have compiled the following recommendations.

Recommendations for Online Codes of Ethics

The recommendations that follow have been adapted from codes of ethics developed by the following healthcare and counseling organizations: American Counseling Association; American School Counselors Association; Health on the Net Foundation; and National Board for Certified Counselors, Inc. These organizations have served as leaders in addressing the ethical implications of online provision of services. The recommendations address known problems as well as the ethical issues raised.

The authors recommend that business practitioners offering or planning to offer services in an online environment create an online code of ethics that can be added to an existing code of ethics. This online code of ethics should address the following areas: professional authority, complementarity and appropriateness, client confidentiality and website security, attribution, honesty in advertising and editorial policy, informed consent, client qualifications, off-line contact, equal access, and authorization. Descriptions of the information to be provided in each section are as follows:

Section 1: Professional authority. Those responsible for providing advice should be qualified professional who are appropriately certified, licensed, and adequately trained. A firm's site may include links to the websites of related certification bodies and licensure boards. Any advice offered by nonqualified individuals or organizations should be clearly labeled and identifiable. If nonprofessionals under the supervision of a professional are offering advice, the supervising professional, with contact information, should be provided.

Section 2: Complementarity and appropriateness. Firms should consider whether a professional-to-client relationship is best provided in a face-to-face meeting. The code of ethics may state that online advice supports, but does not replace, one-on-one meetings.

Section 3: Client confidentiality and website security. This ever-expanding area addresses multiple concerns. First, the degree to which client data and client identity are protected should be identified. Ideally, such protection meets or exceeds any legal requirements that may apply to the professional or to the client. Consideration may be given to using the privacy framework issued by the AICPA/CICA in 2003 regarding necessary security measures and controls. For example, the framework recommends using standard encryption technology for transmitting personal information. Second, clients should be informed of the potential for loss of information at their location, at the advisor's location, and at intermediate sites, as well as the limits of confidentiality. Third, procedures related to the release of client information should be adopted. Fourth, e-mail policies and procedures must be adopted to address access and retention.

Section 4: Attribution. The source and date of the publication of information provided on a site should be identified. The last-modified date of a page should be indicated. Any comments related to the benefits or performance of a specific product or service should be supported with appropriate evidence. Contact information, such as e-mail addresses, should be clearly displayed.

Section 5: Honesty in advertising and editorial policy. The identities of commercial and noncommercial organizations that provide funding, services, or material for the site should be clearly displayed. The advertising policy and the receipt of advertising should be disclosed. Paid advertising should be clearly differentiated from other materials or text.

Section 6: Informed consent. The use of an informed consent form should be considered to ensure that both the client and the professional understand the limitations of online advice provision. The form may indicate that online advising is not appropriate for all situations by identifying the limitations of the online format. Properly constructed, an informed consent form can provide the professional with some protection from liability related to the provision of online services.

Section 7: Client qualification. The professional may need to adopt certain procedures to ensure that advice is given to appropriate clients. Using passwords and other identifiers may deter impostors from gaining access.

Section 8: Off-line contact. Availability should be clearly and understandably identified. Does the firm plan to respond to queries 24/7? Is a backup advisor on call for emergencies? What procedures should be followed in the event of technological failure?

Section 9: Equal access. Consideration should be given to reducing or eliminating any barriers preventing clients with disabilities or minority groups from accessing the website.

Section 10: Authorization. State law is currently unclear as to whether Internet advising occurs in the advisor's or the client's location. As a result, compliance with the laws in both locations may be necessary. Efforts must be made to comply with applicable local, state, and national statues, as well as codes of ethics for professional organizations, certification entities, and licensing boards.

Jeanne H. Yamamura, CPA, MIM, PhD, is an associate professor, and Fritz H. Grupe, PhD, is a professor emeritus, both in the department of accounting and information systems at the University of Nevada-Reno.
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Title Annotation:ethics
Author:Yamamura, Jeanne H.; Grupe, Fritz H.
Publication:The CPA Journal
Date:May 1, 2008
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