Friday afternoon and where is the chocolate?

Friday afternoon and where is the chocolate?

Didn't find your answer?

Does anyone, when engaging, a new client, write to the previous accountant to request clearance and money laundering etc..

I've just lost one, who seems to think he shouldn't pay tax. 25k profit and 43k dividends and it seems enquiries from the new accountant are going through the ex client to me and only today has he passed our address over.

When I take on a new client I always get the old accountants name and address and never get authority signed before I've heard from them. I always wait a month before chasing.

Replies (20)

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By ShirleyM
30th Aug 2013 15:18

Not sure what you mean!

When we get a new client, we prepare a letter to the old accountant on behalf of our new client which authorises the old accountant to handover their information to us.

We send our clearance letter and request for information to the old accountant, and include the authorisation letter from the client. This hopefully prevents any delays.

If we lose a client, I will acknowledge a letter received from the new accountant, but I won't send any information until I have the ex-clients written authority to release it.

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By JDBENJAMIN
30th Aug 2013 16:07

Qualified accountants are always supposed to do this.

However, unqualified accountants often don't do any professional enquiry.

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By Jason Dormer
31st Aug 2013 15:49

Really?

Qualifieds do and unqualifieds often don't?

Thats simply not true.

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Replying to SpreadsheetUser:
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By 0098087
31st Aug 2013 15:55

Yep I lost one to a chartered firm who never write. I was quite surprised. Going back to my first point, the new accountant is using a live.co.uk email
Address. Very surprising in 2013

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By User deleted
31st Aug 2013 16:33

Really? Yes

The poster said that qualifieds are supposed to write (that is not the same as saying that they do) and my experience of unqualifieds is that they rarely, if ever, ask  for the usual "any information to help me decide". They might write to ask for copies of accounts and tax returns, but that is different.

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Replying to lionofludesch:
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By 0098087
31st Aug 2013 16:42

I was really asking if qualifiers were supposed to write. I thought they were but it doesn't seem that they all do. I always do.

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By User deleted
31st Aug 2013 19:39

Depends on what one means by "required"

Both professional bodies of which I am a member state that the new agent should (not may) contact the previous agent. That may not make it an absolute requirement, but since most professionals will abide by their respective body's rules, it pretty much amounts to the same thing. If asked, you'd have to have a pretty good explanation for why you didn't comply.

As for listing reasons why the new agent should not act, you need to bring yourself up to date :)

Such requests disappeared many years ago - the request now is simply for information that the existing agent considers may be useful to the new agent. The onus is on the new agent to decide whether that information gives good reason to accept or refuse.

The post above is somewhat inconsistent - providing only copies of accounts etc but then suggesting that indicating that a client is "fine" when he is not is misleading. If a new agent asks for information relevant to his decision, and you withhold information that you think would clearly influence his decision, is that not deception by omission?

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Replying to I'msorryIhaven'taclue:
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By User deleted
31st Aug 2013 21:59

Provided ...

fawltybasil2575 wrote:

The "incumbent" is obliged to answer the letter (from the "prospective new") correctly.   He must of course reply honestly, and yes there will be occasions where he must consider very carefully possible defamation proceedings if imparting facts implying inappropriate action(s) by the client -

... the information provided is factual, and does not offer an opinion, it would be very difficult to successfully raise an action for defamation. Why? Because:

It is a defence to an action for defamation for the defendant to show that the imputation conveyed by the statement complained of is substantially true

So, yes, one needs to be careful with one's words. I would not for instance say that my client was a slow payer. Because "slow" is subjective. I might, however, advise the new agent that the average time taken to settle fees was 15 months. He can then decide whether that is slow or not, and whether it affects his decision to accept appointment.

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Replying to DJKL:
By ShirleyM
01st Sep 2013 08:26

Malice?

Mercia Accountants wrote:

In other words even if what is said is factually correct, if the motive for saying it can be shown to be malicious there is still a potential claim for damages.

 

I would hope to give a little warning to the new accountant of the problems they will face, but generally I give them a call, rather than commit it to paper. Some are appreciative, and occasionally one is downright rude, in which case I am left with the satisfaction of knowing the sacked ex-client and the new accountant deserve each other.

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By 0098087
31st Aug 2013 21:08

I am a member of the Aat. I always wrote for clearance. As regards this other accountant, I don't even know who he is to even consider reporting him!

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By Cardigan
01st Sep 2013 00:17

I always send clean clearance letters

The one time I felt I needed to include a serious issue in a "clearance letter", I rang the advice section for my professional body. They informed me that under no circumstances, should I include it in the letter due to client confidentiality. So, what's the point of it?

I have only ever received one clearance letter with a "reason I should not accept the appointment". It stated that the client had large outstanding fees. They were right - I shouldn't have taken it on!

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By User deleted
01st Sep 2013 11:17

Malice?

I thought we were talking about professional behaviour here? Of course genuinely malicious behaviour, which by definition is unprofessional, should be dealt with as appropriate, but we were talking about professional standards and rules.

Some may choose to act within the rules of their professional body, and divulge relevant, factual, information. Others may choose to disregard those rules and let the new agent find out for themselves (but in that case do not deserve to be called professionals).

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By ShirleyM
01st Sep 2013 10:37

This is quite interesting!

@Mercia Accountants ... you say that even if the facts were true, you can be prosecuted if they accuse you of acting through malice???? How would they know your intentions, and what would it matter, providing the facts were true and relevant?

If what you state is true, then it confirms my belief that the law often serves to protect the guilty, rather than protect the innocent.

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By Cardigan
01st Sep 2013 11:59

Agree with @Mercia

@ShirleyM, I have to agree with @Mercia. I was told not to put anything on the clearance letters by my own professional body. Otherwise, I could find myself in hot water.

I can only remember one time where I gave the incoming accountant a heads up on the client being a disaster when it came to paperwork but I called rather than committing to paper. This was an amicable move to another accountant due to a change in circumstances so there was no malice. Yet, I would still not put this in the letter, following advice from my professional body.

It really makes no sense.

 

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By ShirleyM
01st Sep 2013 14:08

But what is absolutely necessary?

Is there a definition of which facts. figures, etc. are classed as 'absolutely necessary'?

I sincerely doubt it. So, it seems to indicate that honest accountants cannot warn the new accountant of dishonesty on the part of the client, and the new accountant will have to learn 'the hard way'.

It appears, as I said earlier, that the law is protecting the dishonest at the expense of protecting the honest. It does,however, explain why serial offenders get away with using the same dodge over & over again.

M' Lord .... the law is indeed an [***]! If the facts given are true & fair, there should be no comeback. I can understand prosecuting someone for imparting lies and rumours, but never ever imagined you could be prosecuted for being truthful.

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By ShirleyM
01st Sep 2013 15:37

As you say ...

.... even if/when they admit their dishonesty ... the law defends them. Dishonest people get protected while the innocent, who do their best to protect others, get criminalised!

It makes you think, doesn't it! Making it as easy as possible for people to carry on their dishonesty with impunity isn't really what was intended, I hope!

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By User deleted
01st Sep 2013 16:05

As I said before

Stick to the (pertinent) facts, and you should be OK. Would I tell the new agent that the client is a convicted drug dealer? Probably (though probably not in writing) - because, following the rules laid down by my two professional bodies, I would consider that information to be useful to the new agent in deciding whether or not to act. Malice simply doesn't come into it (but then I consider myself to be an upstanding professional person, treating others as I would have them treat me).

I'd be interested to hear David W's views on this - I'd far rather listen to someone that I can trust to give sound advice on such matters, rather than to someone that appears to know about legal issues, yet feels the need to ask a question about legal privilege - something that most professional accountants and tax advisers should already understand.

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Replying to elliottchandler:
By ShirleyM
01st Sep 2013 16:33

Good point, BKD!

BKD wrote:

.....  someone that appears to know about legal issues, yet feels the need to ask a question about legal privilege - something that most professional accountants and tax advisers should already understand.

I thought legal privilege (or should I say the lack of it) was common knowledge, yet I have never heard of anyone being sued for being truthful. I have been living on a knife edge without realising it.  ;)

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By JDBENJAMIN
01st Sep 2013 16:19

Replies to professional enquiry letters are protected.....

....by qualified privilege. Therefore as long as you write what you reckon is truthful and relevant, then you cannot be sued, even if it turns out what you said was wrong. You can only be sued  for something said under qualified privilege if what you wrote was completely reckless or malicious. On the other hand, leaving something off such a letter that was relevant might get you sued by the incoming accountant, and reported to your governing body. Therefore do the opposite of what most posters are saying, and include anything that might be relevant. When in doubt, put it in.

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By User deleted
02nd Sep 2013 08:07

Someone is missing the point

No-one is arguing that a successful defamation charge may be brought where the disclosure has been reckless and/or made with malice. But that's not what we're talking about. We're talking about professional behaviour - truthfully reporting relevant facts with no malice aforethought.

As previously stated, I will listen to those that have a proven track record in offering advice on matters of a legal nature and not to someone that has demonstrated a lack of knowledge in that department.

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