Counter flashing on a chimney is the second layer of flashing that is applied to make the chimney connection to the roof watertight. It is installed over the top of the first layer of flashing, which is called step flashing. Its edges are embedded into the mortar of the chimney and then are bent down over the step flashing and secured to the roof. You must take special care when installing either type of flashing at corner areas, and you must apply caulk to all edges. If is very easy for water to work its way between layers of flashing if it isn't installed properly.