I would appreciate your input in clarifying this for me.
It is the director's responsibility to maintain & keep the company's records. Therefore, it is their duty to provide accounts, ct returns, registration reference etc to a new accountant if they leave their old one
It is the old accountant's duty to provide professional clearance to the new accountant. They may choose to provide information to new client free of charge or charge for it.
The accountant reserves the right to direct a new accountant to the director for all documents, if they have been provided copies.
Thanks
Replies (19)
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Question?
Those are just statements. What is it about those statements you need clarification on?
Just provide the information.
In the time it has taken you to write your statement, you could have complied with the request.
Whether or not the statements are true, and setting aside the regular discussion about 'clearance', surely the only sensible thing to do is to respond to the new agent's request (assuming such request is reasonable), and move on. Dwelling on anything relating to an ex client is almost certainly more of a waste of time than dashing off a quick letter or email.
Put yourself in the new accountants place
How often have you been frustrated when an old accountant won't provide the information? Consider it swings and roundabouts - after all it isn't the new accountants fault that the client is leaving.
I bet the issue here is unpaid fees
Theory and practice
In theory, an accountant is only obliged to provide information that would not necessarily be available to the client. So if the client has copies of everything, you are not legally obliged to provide it.
In practice, an accountant will normally provide copies of the last year's information, along with all references. This is professional courtesy and, as others have pointed out, is a practice that benefits you when you are the new accountant.
Most of the professional bodies frown on charging for providing this information unless the request is excessive.
Didn't say that
Not showing professional courtesy could be considered unprofessional behaviour. Professional bodies can take action against members that engage in unprofessional behaviour likely to affect the image of that body. Stepurhan has clarified it for me. In that is professional courtesy & u will not be struck off if you do not
Also you shouldn't just think of it in terms of being struck off. If you are unhelpful to others, they may well be equally unhelpful to you in return. Following your actions another firm says they have given the client everything, and so will provide nothing (or will levy a charge for doing so) The client can't find their copies. What will you do then?
But of course there may be worse things in life than being struck off, I would not use "merely" re professional courtesy, there is no mere about it, it ought to be central to how one acts towards clients and others.
For any occupation to be deemed a profession those that pursue that occupation need to act in a professional manner, the rules of X or Y association ought to be neither here nor there as to how one behaves. Stop behaving like professionals and the public will soon stop treating/respecting as professionals.
e.g one prime example of devalued professional standing over the last 40-50 years is the teaching profession, there are plenty of others , more recently possibly bank managers!!
Leaving the door open
I think generally people feel if they are helpful they it leave it possible for the client to have a rethink in later years and approach you again as a client.
Waste of time
Please don't waste our time especially at this time of year. Keep these theoretical questions until February.
ICAEW ACCA etc
It appears you have all misunderstood my question. I merely wanted to find out if it is a RULE that accountants transfer information to new accountant or whether it is out of COURTESY. These are two different things, regardless of what I would do in this circumstance or what everyone else is doing. The purpose of the question is to gain knowledge & not for directions Thanks
Best to contact your Institute or consult the members handbook.
Whose Rules?
It appears you have all misunderstood my question. I merely wanted to find out if it is a RULE that accountants transfer information to new accountant or whether it is out of COURTESY. These are two different things, regardless of what I would do in this circumstance or what everyone else is doing. The purpose of the question is to gain knowledge & not for directions Thanks
Then you must qualify your meaning of "rule". Do you mean rule of law, in which case do you mean English law? Or one of the rules of your institute? There is no rule of law, save that you are legally obliged to forward any of the client's property that is in your possession (but that wasn't your question). I looked in my Rules of Golf and they were silent on the matter.
To what end?
For future reference. Remember to actually ask a question in the OP. Say that it is a purely theoretical one if that is the case. The purpose of the question is to gain knowledge & not for directions Thanks
Because people have taken the time to give you answers applicable to the real world, and are justifiably annoyed that you have practically told them off for doing so.
Now a question for you. What is the point of finding out the strict legal position if you are not intending to apply it to the real world? The only reason I can think of is that it is to answer a study question. If that is the case then that is also something you should state at the outset.
Need to distinguish...
...between "clearance" and "handover."
If you are a member of a professional accountancy body, then there will be a "rule" that you inform the successor accountant of matters which may be germane as to his decision whether or not to accept the appointment (commonly referred to as "clearance" although that is really a misnomer and harks back to a past now forgotten).
As for handover info, there will be rules about supplying what is reasonably required by the successor. If you have already supplied the equivalent to the client, then in theory you needn't supply again as that would no longer be reasonably required, but in practice it is because a) it's easier and b) it's courteous.
If you are not a professional accountant and want to play fast and loose, then (in theory at least) you can't get out of your obligations to your client but they would need to get the lawyers involved to enforce them.
Does that help?