Discussion points
Sole traders and actuaries in small
firms are usually experienced but it can be hard for them to find the time to
keep up-to-date with technology and technical and professional
developments. Compared to actuaries
working in larger organisations there can be fewer people to ask and less
overall support. There may also be less willingness to access specialist
expertise such as legal advice, because it’s not available in-house, so
introduces delays, and has a direct and visible cost rather than something
which is part of the overheads of an organisation.
Sole traders can be working in a range
of situations, including:
In
this case study the consultancy has probably signed a non disclosure agreement
(NDA) with the client firm so it is hard to discuss issues arising outside of
their firm or the client firm. Such
clauses would usually allow disclosures required by law or the actuarial
profession, but not the sort of commercial issue in this case study.
What
other resources or organisations could Mike and Samantha call upon without
breaching the NDA?
When
we go back to read a document (e.g. terms of reference, minutes of a key meeting)
we may well find that it doesn’t quite support our recollection of what it says
as clearly as we had previously thought.
Integrity – act
honestly and with highest standards of integrity – Mike seems far too relaxed
about misleading his customer and not administering policies properly
Competence and care
– Members will perform their professional duties competently and with care –
Mike didn’t take enough care and pay attention to the detail at the key moment
of agreeing “terms of reference” in this case study
Impartiality
– Members will not allow bias, conflict of interest, or the undue influence of
others to override professional judgement – here Mike is concerned about his
upgrade commitments and allowing this to get in the way of thinking clearly
about his customer and their end customers.
Communication
– Members will communicate effectively and meet all applicable reporting
standards – Mike has failed to do this in agreeing the scope of work for the
client.
If
the work the model will be used for falls in the scope of the Financial
Reporting Council’s Generic TASs then there may be TAS M: Modelling
considerations.
Many
companies have strict procurement processes for taking on new clients including
proper contract reviews with the benefit of legal input. Such a process would clearly have helped Mike
to avoid some of the issues arising.
What
are the general options for resolving a difference of understanding?
There
are many options possible for Mike, including:
A serious difference of
understanding is at the root of the issues in this case study. Mike could have another open discussion with
the client, explain what he honestly thinks and suggest that the work to develop
a system for a more complex product is done properly, however long it will
take. He might refuse to do a quick and
dirty patch on the system for the simple product to extend it to cover a more
complex product.
The client may agree that a
quick fix is sufficient to get their innovative product launched with a view to
improving the administration system later “if they get a chance to do so”. Mike and Samantha would then have to weigh up
if this was really okay. There must be a
good chance that the work to improve the system would never be done, or done
late or incompletely.
Mike could offer to do the
extra work that the client has expected for free, or at a substantially reduced
charge rate, or to spend time handing over to another firm free of charge, to
minimise the impact on his customer and try to retain goodwill.
