Liability to third parties

Liability to third parties

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We took on a new start up client (ltd company) about six months ago to do stat accounts, tax compliance and bookkeeping including VAT returns. All straightforward but it now appears that the client is required to provide quarterly management accounts to the bank who provided the loan to start up, which they have asked us to do. Aside from the fact that client did not tell us in the first place, which we will deal with separately, does anyone else prepare management accounts in such circumstances and how do they limit any liability to the bank, if at all?

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By Euan MacLennan
06th Feb 2015 11:17

Do's and Don't's

Do amend you engagement letter to say that you will prepare management accounts for the client and for the client alone and that you have no liability to anyone else to whom the client might show the management accounts.

Don't ever send the management accounts direct to the bank

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By Ian Bee
06th Feb 2015 13:36

Thanks Euan.

That's along the lines I was thinking but good to have it confirmed.

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