Uncooperative accountant

Uncooperative accountant

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Despite paying my dear accountant he has failed to correct my 2005-2006 financial report after making some serious mistakes and he has broken his contact with me possibly because I haven’t asked him to do my account for the following year. Can anyone advise me what I can do to make my accountant correct the faulty report?I have been trying for 6 months now without result. If I get a tax inquiry my accounts are wrong. I have even asked him to take insurance in case of tax enquiry but I haven’t got a response. Do I have to pay again to another accountant to do my accounts right?
Thank you
Lost in the accounts
yorky

Replies (29)

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By AnonymousUser
06th Jun 2008 10:30

ICMA Malaysia
Hello Cooperative Accountant!

Are you cooperating type accountant or member in the Malaysian Institute of Cooperative & Management Accountant?

Clarify.

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By User deleted
06th Jun 2008 05:36

Responses from Philip Turnbull
Since Philip Turnbull starts putting up posts/threads here but did not respond to queries from readers, may I suggest that we write to ICAEW and the Privy Council over what Philip promised to do as found in his posts.

Get the Privy Council's and ICAEW replies and get their permission to publish them here for the sake of eager waiting readers awaiting Philip Turnbull's feedbacks.

I am just a 'cooperative accountant'.

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By User deleted
09th May 2008 19:35

capital expenditure & revenue expenditure
As I see it, the £20000 is split into £15000 fixture and fittings in the balance sheet as capital expenditure and £5000 revenue expenditure (repairs and renewals) in the profit and loss account. For the £15000 I see a depreciation of £1500. I can’t say that I understand the accounts 100% but I deserve an explanation for the £2500 accountancy fee paid as a sole trader.

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By Bil Loh
12th May 2008 04:28

Qualified "uncooperative accountants"
I wish to, hereby, mention another category of accountants worth mentioning.

They are the ones who does their work languidly, does things in a perfunctory manner, and are the creators of today's corporate collapses. This, is in exception, to those corporate collapses headed by unscrupulous, arrogant and ignorant and rogue CEOs who dominated the corporate scenes and turn their companies to financials fiascos falling into the "Guinness Books of records" high price failures successors.

Professionalism covers disciplinatory actions and concerns over those lanquid accountants.

In response to Dennis Miller, I did mention in my first posting that the matter be better reported to the accountant's professional body for disciplinary actions. If the "accountant" belongs to the rogue undisciplined category, then I suggest YORKY join Philip Turnbull in his crusade to protect 'accountant' but please support my classification of the term "first tier" bodies as defined by the ICAEW to include the deservedly members of AIA who qualified under the CA1989.

As for the rest of AIA members qualified before CA 1989, a special course such as workshop and perhaps, an interview exam be conducted to qualify them to be "first tiers".

As for categories other than I described above such as any members admitted via a lower-grade than RQB/CCAB qualification, the decision shall be left to the authorities studying the case.

My recommendation is that they be given the chance to write the final four or five papers of any RQB body plus given a workshop to attend to update and upgrade their professional accountancy knowledge and ethics.

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By Bil Loh
12th May 2008 04:15

Anon & Dennis Miller - 9 May 2008
I should have repeated my points as regards "qualified accountants" and crusading for the protection of the term 'accountants'.

Let me define PROFESSIONAL ACCOUNTANTS as those having a professional qualifications of RQB/CCAB equal standing and no hanky-panky admission of members for direct membership for holding qualifications and experience defined as less than or lower than my definition above. This category of unqualified professional accountants should not be recognised as "first tier" qualifications as defined by the ICAEW. I fully and strongly support ICAEW's stance as to its definition of "first tier qualifications" but I strongly disagree with the ICAEW for falling short of INCLUDING AIA MEMBERS QUALIFIED BY EXAMINATIONS RECOGNISED BY THE DTI, ie RQB recognised examinations under the CA 1989. AIA's RQB status is recognised under the CA 1989 and as such all AIA qualifieds after this cut-off date should fall under the first tier qulifications as defined by ICAEW.

To ICAEW CEO, hope you are clear now as to what I am writing here for the sake of the profession ACCOUNTANT to be defined as "first tier" recognition. Please go ahead and protect the term ACCOUNTANT, just like the IAASB had done.

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By User deleted
10th May 2008 10:40

Fees
One can never make any fair judgement on fees without knowing the full circumstances - we dont know what this client required or the work involved. Just because he is a soletrader on what grounds can you say £2,500 is excessive?!

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By User deleted
09th May 2008 20:43

courtesy
I would expect at least the courtesy of returning my phone calls or/and registered letter.

Obviously we don't know all the facts, but I'm astounded at £2,500 being charged to a sole trader!

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By User deleted
09th May 2008 20:43

capital expenditure & revenue expenditure
The example given is to show my understanding of the two terminologies that one of the readers had questioned. The problem is somewhere else which you can read below.
I can't remember agreeing any fee in any engagement letter not saying that there has been such a letter. Regarding the fee I am happy to pay for a correct accountancy work not otherwise.


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By User deleted
13th May 2008 00:50

information as power
There are two main patient groups. The ones that want to know what is happening to them and require information and others that trust you and don’t question anything. With the widespread use of internet people are more knowledgeable nowadays and we need to spend more time to give a better understanding.

Some consider information as power and don’t like to deal with “nosey” clients. If the problem is request of information I admit that I am the problem because I want to know what is going on to a reasonable level.

By disengagement letter I meant a letter indicating that the accountant doesn’t have the client’s consent for further contacts with the tax office in order to limit the damage.

As I have mentioned before the pay is not the main issue here. The issue is that I have paid for a work that I can do better than the junior accountant. The issue is that he is not bothered to resolve the differences. I am sure ICAEW doesn’t want to protect the cowboy accountants and will follow their complaint procedure as any other decent organisation if it comes to that point.

I will continue my search for an accountant who can communicate with his/her client. In this case it seems the accountant needed advice about how to deal with client and to act when a problem arises. At the end of the day it is the client who carries the responsibility.
By the way you might have an expensive dentist.

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DougScott
By Dougscott
12th May 2008 17:25

Incoherent
I don't think you will get much of an answer on here because your postings are so incoherent it is difficult to tell whether it is you or your accountant who is the problem.

Whatever you should have an engagement letter from your accountant which sets out clearly the terms and fees. Accountants are as expensive as dentists so expect to pay £100 or more per hour (though that's not to say that you can't find really good accountants for considerably less if you look hard enough).

You may provide records but if they are not done correctly the accountant may have to do them again in which case it is perfectly possible for an accountant to spend 25hours on your accounts and tax returns over a year (ie. £2500). £500 is only 5 hours so sounds very reasonable to me.

The fact that an accountant is a qualified ICAEW can be pretty meaningless - there are plenty of incompetent/inexperienced/disorganised/overbusy ones out there, just as there are some excellent unqualified accountants who are competent/experienced/organised/nottoobusy. A high fee is no guarantee of a competent service. In a small-medium practise mistakes can often happen if an inexperienced junior prepares the accounts and the boss doesn't review them properly. Don't expect the ICAEW to help you though - they are there to protect their members not deal with client complaints unless they really are very serious and properly evidenced.

Your best bet is to find an accountant recommended by fellow dentists. Just remember a little knowledge is a dangerous thing so if you do find a good accountant don't try and tell them how to do their job. You clearly know about as much about accounts as I know about dentisry.

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By User deleted
12th May 2008 12:34

Fees and incorporation
You would think with all the accounts being on a spread sheet made things easier and being a single dentist doesn’t make any excuse for a high fee. I would correct my account before taking any action. Do I need to write a disengagement letter? I have already paid £500 to another accountant to review my accounts highlighting 11 concern points and a comment of “never seen anything like it”. Is the £500 fee a reasonable one for a review? Who can my next accountant be? With these fees I might as well incorporate. Although PCT has got hold of the Goodwill and won’t let go easily and in some cases has denied the transfer. Can one be a sole trader when dealing with PCT and company with regards to tax issues if it worth it?

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By paulwakefield1
14th May 2008 08:48

Accountant versus dentist
Well said.

I have been rather shocked by the attitude of some of my fellow professionals' postings. I think the OP has remained remarkably polite in the circumstances.

There is a problem (a real problem as acknowledged by his accountant). It seems perfectly fair and reasonable to want it explained and corrected.

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By Robjoy
13th May 2008 19:10

Accountants versus dentists
I've been to the dentist today, preparation for bridgework over implants, so the comparison is fresh in my mind, even if the disgusting taste of the various gunk I've had in my mouth is at last wearing off.

My dentist explains what he's doing in as much detail as I require - just like my accountant. He is a highly regarded professional and charges accordingly - just like my accountant. He educates me about his field of expertise sufficiently for me to be able to maintain things properly - just like my accountant. He has more junior staff to do work appropriate to their abilities and assist him - just like my accountant.

Most of all, he listens to my concerns about what he has done or proposes to do, addresses anything that isn't right and doesn't treat me like an idiot - just like my accountant.

Your accountant is evidently not like mine.

The contributors to this thread don't expect yorky's accountant to be able to fill teeth, do they? But they expect that he'll be able to follow instructions to clean his own teeth properly. I would argue that if yorky's understanding of his accounts is lacking, and there is nothing wrong with them, his accountant is still in the wrong for not explaining things, just as yorky would be in the wrong for refusing to explain to a patient why they needed a filling.

I paid £1,600 for this morning's dentistry - if I feel that something is wrong with what he did, I know he will either explain to me why it is all fine, or put it right. That's all yorky is asking.

Yorky has to comply with high standards of professional behaviour, and expects the same standard from his accountant. Hardly unreasonable. I'd advise you to telephone other accountants (certainly ask other dentists). First judgement: if you can't get to have a few minutes chat with the accountant, during which he sounds interested in you and your business, and addresses you as an equal, try another one.

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By amarshah69
12th May 2008 09:48

Formal Complaint
Lodge a formal complaint against him with the ICAEW ... then see how quickly he replies

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By User deleted
10th May 2008 11:26

Defending Nicola
I suspect the intimation is that if a sole trader has accountancy fees of £2,500, there is a fair chance that the business is large enough to warrant incorporation.

Of course, as already suggested, there are many factors which could be relevant and may not have been mentioned, but generally speaking, the clients I have which have larger fees tend to be companies.

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By User deleted
09th May 2008 20:10

Now I'm confused!
It sounds like you're saying that you can see £15k in one place & £5k in another plus depreciation which surely means you're happy that the entries exist correctly? But you're complaining about the amount he's charged you - which presumably you'd agreed in an engagement letter?
So where's the problem??

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DougScott
By Dougscott
09th May 2008 16:31

Terminology
Your terminology is confusing but I think what you are saying is that £20000 of repairs, equipment and building expenditure didn't appear in your original accounts in either the Profit and Loss Account or on the Balance Sheet? Is that correct?
It then seems that the accountant has capitalised at least some of this expenditure to Tangible Assets on the Blance Sheet. Are you sure the balance hasn't been posted to the Profit and Loss Account as revenue expenditure?
As far as tax treatment goes capital expenditure is not tax deductible (though capital allowances may be available on qualifying expenditure) whereas revenue expenditure is tax deductible. The figures that go on your tax return may therefore not match the figures that appear in your accounts.
Also I don't see how your tax return could be submitted before the accounts were completed - that just doesn't make sense!

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By User deleted
09th May 2008 14:43

lack of communication
I admit there is a lack of communication since he has stopped replying.
The 20000 is a combination of repair, equipment and building work which is missing on the financial report. The building work should have had a separate entry as tangible asset. This was added on the second try but it still didn't cover the whole expenditure. I'll try again to open the communication channel while I look for a new accountant. The miss has been acknowledged by himself so it is not my lack of accounting knowledge.

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By User deleted
09th May 2008 14:21

Errors?
The points you make dont actually show an error(s) have been made,what is does show is perhaps a lack of communication between all involved.

Their are many reasons why expenditure you have recorded may not readily reconcile to your accounts. In simple terms it may be items such as new equipment/HP payments/drawings/loan repayments etc. This does not mean the accounts/tax return are wrong at all.

Dont be so quick to claim it is an error when you dont, with respect, understand how accounts are prepared.

I would advise you send a letter by recorded delivery to your former accountant and explain you have concerns and ask for clarification of the matters you are not happy with. Only once this has been done and you have given time for a reply should you be considering taking matters any further.

My advice in future is to talk with your accountant - get an accountant in future who you feel comfortable talking to. Most qualified accountants can do the job but you will get huge differences in how they relate to clients.

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Euan's picture
By Euan MacLennan
09th May 2008 13:17

Another thought
Was the £20,000 capital expenditure on a fixed asset such as a car or van?

Capital expenditure and payment of personal bills are not deductible from business profits, nor are "wages" drawn by a sole trader.

Can you explain what the "unallocated expenditure" was?

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By User deleted
09th May 2008 13:11

Just a thought
Was the £20,000 your wages? And do you operate as a sole trader?

It's a possibility...

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By dennismiller
09th May 2008 13:04

Just when I thought ...
we would learn that the accountant was an unqualified, it turns out that "He is a member of ICAEW"!!

Just goes to show that you get good or bad accountants, the qualifications don't matter!

I would advise you to go to somebody who can do the job, and be available to talk to you about it. Cut your losses, don't give yourself the aggro of trying to sort out his mess.

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By User deleted
09th May 2008 12:26

more facts
Tax return and accounts were consistent. The books were made on a spreadsheet which was used by the (junior?) accountant of the company.
I have highlighted the problem area. I received an updated account report which was still wrong. The total expenditure didn't match the books. I requested a second correction identifying the exact figures with no further reply.
He is a member of ICAEW

Errors:
1- Unallocated expenditure of around £20000.00
2- Deduction of Finance expenditure for the full year although the business only operated 6 months of the year. (I suppose this is to my favour!)

Thank you for your comments

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By Bil Loh
09th May 2008 10:45

Report to the accountant's professional body as last resort
Is it possible to ask the accountant to rectify his error? If all attempts failed, write to his professional body and report the matter to the disciplinary dept.

Too bad if your accountant is neither RQB/CCAB qualified. In that case, you better join forces with Philip Turnbull to crusade for protection of the term 'accountant'.

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By User deleted
09th May 2008 10:30

Explain further
What exactly is the 'error' - is it in your accounts or your tax return, and why do you feel it has arisen? Accountants can only prepare accounts and tax returns from information actually supplied by clients at the time.

What actual steps have you taken to get the 'corrections' done?

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By User deleted
09th May 2008 09:50

fair comment
Thanks Clint.

It is not easy to find the right one. This one was a well publicised one that got me in the trap.

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By User deleted
09th May 2008 09:41

"mistakes happen"
Thanks Andy,

in reply to your questions please note:
1- The tax return was done before the financial report and I noticed the errors later.
2- The errors have been aknowledged by saying "mistakes happen".

I am trying hard to hear the other side of the story but he is not replying to my emails or registered letters.

thank you

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By skylarking
09th May 2008 09:17

There's more to this, I suspect
It is difficult to get the measure of what is happening because of the terminology used, but it seems as though your accountant has filed your 2005/6 accounts/tax return and you now believe them to be incorrect. I presume they have been filed because you are worried about an enquiry resulting.
A couple of things to consider:
1. Your accountant would not have filed them unless you had agreed they were correct
2. He could only have prepared them from documents and information you had supplied him with
If you agree with these two points it is possible to see how you are putting him in an awkward position by saying the accounts are incorrect some time after the event. Perhaps he does not believe or can not agree your 'correction'. There may be a technical accounting reason for this or he may no longer trust your judgement.
There are two sides to every story.

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By AnonymousUser
09th May 2008 00:58

The practical answer ...
... I'm very sorry to say, is yes, you may have to pay to get the accounts done over.

It is a sorry situation, and you are not alone.

There are all sorts of alternative convoluted solutions. Whether you have the stamina and mindset to deal with the alternatives is very much a personal issue. And indeed you can make life pretty uncomfortable for the accountant, if you are of a punitive frame of mind (I probably would be). Whether you would recover your losses in full from such a course, well, I have my doubts.

I say this, of course, having only one side of the picture, and accepting as fact the OP as being a fair reflection of the circumstances.

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