My client former accountants member of ICPA not providing professional clearance or company records as they have not been paid but my client says they have not done the work
Our client wishes us to file the company accounts but need the company records
I understand ICPA membership is voluntary. Are they powerless to help my client to get the company records or is this one for the lawyers.
Replies (25)
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Don’t get involved and decide if you really want the client and if can work with the information available. I don’t believe Institutes get involved in fee disputes in any case. Why hasn’t the client got their own records?
If they say they haven't been paid then they are within their rights to withold info and work, and quite rightly so. I'd say that your client has no idea whether they have or have not done the work since the accountant hasnt been paid they would have nothing to go by as to whether it had or hadn't.
I'd be advising to pay if it were me. After all, you'd want paying wouldnt you?
If they say they haven't been paid then they are within their rights to withold info and work, and quite rightly so.
I disagree. Their remedy is through the courts, not by holding the company to ransom.
Bullying is for HMRC, not for the profession.
Exercising a lien is legit and a legal remedy.
Not sure a lien can be enforced on docs which are the property of the client. Bank statements you can get from the bank. They have to keep years available.
However on the OP info what work was done to justify a fee?
Exercising a lien is legit and a legal remedy.
You can't put the client in a position where he is unable to fulfil his legal obligations.
There are some fine distinctions in the ICAEW guidance. I read para 20 to say that the books of prime entry are 'Accounting Records' - over which a lien cannot be asserted, but that the source documents (invoices etc) are not 'Accounting Records'. Para 14 makes clear that a lien over documents can be permissible.
I'm a member of ICPA and, I'm quite sure many contributors to this forum, are too? It's a genuinely supportive organisation, operated to an extremely professional and high standard, by Tony Margaritelli and, his team.
Regretfully, this type of post, is where the Aweb forum displays its shortcomings.
We're not privy to the precise nature and the background to the change in advisers.
Have the accounts been prepared by the previous accountants and, is the client who wishes you to now act, simply not wanting to pay? Or, literally hasn't any work been completed but, an account has been raised?
Was there a letter of engagement, or alternative agreement, in place?
I can't see how the ICPA could assist you, or your client and, in fairness, why should they? There is very little evidence here, in a tangible form, of anything untoward, from what I can see.
As the previous post suggests, you need to determine if this is a case you wish to take on.
There are two parts to this:
The professional “clearance” (a misnomer these days) which should be given regardless of any fee dispute.
Information/records may be retained pending settlement of fees but not so that it prejudices the client’s compliance position. If withholding information causes, for instance, a fine for late filing of accounts the client would be entitled to sue the previous adviser.
Although Companies House will have no interest in the dispute I would have thought that refusal of the previous agent to hand over the records would be reasonable grounds for granting a filing extension. If not, you could always shorten the ARD by 1 day.
A client who has not paid his previous accountant should ring alarm bells. I would advise that you carefully consider whether this is a client you want, and, if so, then make sure you get at least some payment in advance.
There is a lot of truth in the old adage about leopards and spots.
A classic case of he said, she said and it is impossible to know who is in the right here. I would inclined to avoid taking on this client on until they have settled their affairs with their former accountant.
You can get round the professional clearance point by following the Institute’s protocol for these circumstances.
That doesn’t help you with the accounting information you need. In that respect, are the client’s records really entirely manual, which is what your question seems to suggest?
I've just had a success in extracting information from a truculent previous adviser by musing that I considered sufficient grounds existed to merit a report to the Office of the Information Commissioner. I invited them to consider my letter as a letter of complaint, advised them to contact their insurers and perhaps reflect upon the ownership of the data held. The 3 month's bickering with my client evaporated overnight and I have been love-bombed with information since.
Can you break it down into:
1. Work that is not in dispute, eg filed prior year accounts, and other filed items (assuming the accountants are not so dim to file things unpaid)
2. Work that is in dispute, ie claimed to have worked on but not been paid for?
Steer well clear. I unfortunately took on a couple of clients early on in my practice in a similar predicament. When the time came they did exactly the same to me, leaving debts unpaid!
I used to believe potential clients when they said ‘the accountant did this, didn’t do that etc’ but mostly, it is the client at fault.