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Process for taking over new clients from where previous accountant left

Process for taking over new clients from where...

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I am pleased with 2 recent client sign ups. I find it difficult to ask this question about client takeover process. I will just  swallow my pride and just ask.

I think I am terribly  inefficient and also need to improve my skills/knowledge with the client takeover process from where the previous accountant left.

I would be grateful for your input/comment on the following areas:

  • Takover of the client during mid year. Where do I start from? Bank rec? What if no bank rec  is only done towards year end? Trial balance up to the start of the period I take over? What if bookeeping is maintained by client? Purchase and sales ledger? Just ask for list of derbtors and creditors?
  • Payroll - again if  take over mid year- Should I just ask for p60 up the start period of me taking over? Apart from HMRC info, is there anything else?
  • VAT - I just cannot make sense of the last VAT return produced by the previous accountant. What is the best way to hanlde this?

I would like to systemise this process.


Replies (38)

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By ShirleyM
26th Jul 2011 07:07

Find out!

You should really get this information before quoting and before accepting the client. There are so many variables. What services are you providing and what is the client happy to do?

Who does the bookkeeping? Is it manual or computerised. If computerised is it an accounting package, and if so, do you have the software? What VAT system are they on and how are the records presented? 

You need all this information before you quote a fee. Once you know how things are done currently, you can then decide if it is something you are happy to continue, or would you recommend changes, and implement them?

If for instance, they want you to do the bookkeeping & VAT, and they currently have 6 months manual records, they may agree for it to go onto a computerised system. In this event you need a one-off fee for the transfer of data.

Same with payroll. Is it manual or computerised? If transferring payroll to different software you just need the company & staff details, and the year to date reports. I would just put the year to date figures into the payroll software, but keep the reports to help with the reconciliation of the accounts (but then I'm rusty, as we haven't done payroll for years now and use an agency).

The answers to all these questions will determine your 'system processes'.

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By Red Leader
26th Jul 2011 15:00


When taking over the payroll mid-year, you need to get the P11's (not to be confused with P11D) for each employee for both tax and NI up to the last month that the previous accountant did. Also get a copy of the P35 and P60's for the last completed year. Confirm all the regular monthly salaries or hourly rates with the client before you process the first month.  Good idea to make sure the employee addresses are up to date as well, these often fail to be maintained. Ensure you have dates of birth and NI numbers for all employees. Of course, also get HMRC agent authorisation.

Good luck FT.

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By FirstTab
26th Jul 2011 23:14

Finding out is not always possible

Thanks for the response.

Shirley finding out is not always possible for the following reasons:

Client does not want me to contact the accountant for various reasons (eg He has been with the acct for several years and just prefers no further contact)Client does not understand what questions I am askingPrevious accountant has lost the client. The last thing they want is to help make the new accountant's life easier.

If I waited to find out more before quoting a fee, the client would go elsewhere. There has not been an instance where I have made a loss on a job by quoting a fee by going on limited information and gut feel. The fee would not have been any different by having more information.

I think I will just accept on some areas it just takes time.


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Mark Lee 2017
By Mark Lee
27th Jul 2011 09:12

Extra fee for extra weok

Can't help on the specifics sorry. But I'd suggest putting in place a process that allows you to quote a fee for recurring work and to retain the facility to charge separately for ad-hoc work - which could include that created by undue hassle re the takeover from your predecessor.   You can always choose to waive the extra fee related to takeover work - and should make clear when you do this to build client goodwill.

Most of us do the extra work when we takeover a client but fail to evidence the extent to which we have doen work over and above the norm. In so doing we fail to buiold the goodwill we hoped to generate.

Good luck


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By aggy91
27th Jul 2011 11:53

An answer, not necessarily THE answer


I am glad that you indicate a lack of experience in answering this question but I have to ask. Are these the first clients you have taken over, and if not what did you do before?
Running through in order:
I notice from earlier questions that you are ACCA qualified. What does your institute say should happen?

At the very least writing to the previous firm is an act of professional courtesy, do they even know the client has left? Are they racking up chargeable time that they would not be able to bill?

A standard question to ask is if there are any issues that would stop you taking the work. Do you even know for sure that the client did leave and was not get “sacked” by the previous accountant for some reason? In the profession we sometimes do things to protect our own backsides. This is the first such action you should be taking.

One of the big concerns I always hear from clients is that their previous accountant has so much history. I always promise that I will do everything I can to learn that. We keep so much useful information on our permanent files that is easy to forget about if not prodded. So when writing to the previous accountant I ask for CGT schedules, IHT histories, copies of leases or freeholds and anything else I can think of that they might have (don’t rely on the client to know what the accountant might have, ask anyway).
There can not really be any set procedure when taking over mid-year. Indeed sometimes I suggest clients delay switching whilst work is finished (eg. Not much point taking over a payroll in month 12 unless there are serious issues). You just have to go from what seems sensible.

Payroll – Red Leader covers it, but from the question I’d suggest doing a payroll course.

VAT – I assume that the return is more complicated than just a list of invoices. If there are entries that you cannot see how they were calculated then this is a question for your letter to the previous accountant. Is the client on a VAT scheme? Was the previous accountant trying to hide a mess-up? If the client gets a visit its on your watch, you have to be able to answer the HMRC questions. The client will blame you if you can’t

From your replay further down I cannot see any reason from what you list that would stop me writing to the previous accountant. The client doesn’t want you to? Explain the above, emphasis that you cannot do your job without having done it.

Client does not understand the questions? Isn’t that what they are paying you for? If a client does not understand an entry on their return do you remove it? Or do you try to explain it and if they still don’t get it then you ask them to trust you.

Every accountant loses jobs on occasion, professional courtesy works both ways and it is your duty to supply the information requested. If they resist to long threaten to report them to their professional body for non-cooperation. Indeed when I get a request I over provide, and CC to the client, you’d be surprised how many return the next year because they realize how much more you did for them then your replacement.

As Mark says make the takeover work your first step in building the goodwill. I’m always clear that such work is not charged for assuming that it is no more than usual, and if it is make the client aware what the problems are, and if it will cost more. Sometimes clients can help with that especially if it will cost them money otherwise.

Ultimately you are in business, it is up to you how you run it. If you do not have the experience what are you doing to get it? Its fine asking questions on message boards but you will only ever get general answers. You need to find some way of building the experience that you seem to be lacking. Passing exams and filing forms to get practicing certificates is all well and good, but now the training wheels are off and you have a duty to your clients. If I was you I’d be trying to find ways of getting experience in the areas you are lacking. Maybe freelance work for a bigger firm locally? Or limit your work to areas you do know and can do well, we all need specialists sometimes. The worst thing you can do is mess up due to lack of knowledge. At best you will lose your clients and your name.


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By Elaine Clark
27th Jul 2011 12:04

ACCA rules different to ICAEW then?


Do the members of ACCA not have to do a professional courtesy letter like the ICAEW members do?


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By FirstTab
27th Jul 2011 13:37

I am not that bad

Thanks for the response all.

Just to be clear I do not mess up client records. I do not think everyone has all the experience despite what they claim. Bear in mind if I do mess up I also take a big risk as well on being sued, reputation etc.

I do seek paid help where there is a need. At the same time I do not take a risk free approach. At times, I do dive in and get the job and then think about how. There are many people around, if I need, will help me for a small fee they would help.

I was seeking an answer on a question on which there cannot be a clear answer.


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By ShirleyM
27th Jul 2011 14:52


I think you are quite right in saying that you are inexperienced in some areas. Personally, I also consider myself to be a little naive and gullible, but the alarm bells would be ringing loud and clear in the situation you describe. I cannot for the life of me see why a client would not want the new accountant to contact the old accountant. It could result in increased fees (for work being completed twice) or incorrect accounts/tax, because you are not fully aware of the history.

Even if the situation is totally above board, and innocent, he/she is handicapping your ability to give him/her a good, and accurate, service. You are also allowing him/her to dictate proceedings from the word 'go'. At what point do you stop being a yes-man?

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By FirstTab
27th Jul 2011 16:16

Different people different ways of working

I worked most of the day today and yesterday on client in question. I also spent couple of hours of hours with the client. I have sussed his systems out.

They are so many reasons why a client does not want the accountant to contact his previous acct. I respect client wishes and highlights the risks

I may be a yes man - I am happy with this. He is a very good fee client.

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By Elaine Clark
27th Jul 2011 16:24

Ignore ACCA ethics then?


So in this case you would choose to ignore your ACCA guidance on professional courtesy letters?  Interesting.


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By aggy91
27th Jul 2011 16:30

Clear answer

Hi First,

I trained ICAEW so have never studied the requirements for ACCA, my answer was based on the minimum amount required under their rules augmented by my own experience. However I have been and looked up the ACCA rules on your behalf. The following passage is from their helpsheet "Obtaining professional work” located at


“Section 210 of the Code of Ethics and Conduct sets out various
requirements concerning professional appointments, including
changes in appointments. An accountant who is asked to accept
an appointment to perform any recurring professional work must,
save where the client has not previously had an accountant
acting for him or her, request the prospective client’s permission
to communicate with the existing accountant. If such permission
is refused by the prospective client, the appointment should be
declined. Where permission is granted, the duty to communicate
with the previous accountant applies even if that other accountant
is not a member of ACCA or is not qualified at all.”


It continues but you can read that yourself. Seems a pretty clear answer to me.

You are right that no one has all the experience, but you must understand why people might be concerned at some of the responses you give. I notice whilst typing this you have responded stating that he is a good fee payer. That’s great but it does not take away your responsibilities to him and yourself.

It is no one on this boards place to tell you how to run your business, as I said before the training wheels are off. But please do not ask for advice then brush it off with statement like “I was seeking an answer on a question on which there cannot be a clear answer.” When clearly there is. No one is suggesting a risk free business. But be warned a quote first worry about it later approach is not just high risk, it is highly dangerous, and at least in my opinion, does your clients no favours.

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By Elaine Clark
27th Jul 2011 16:36

thanks aggy91

Thank you for the clarification on that.

Great post

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By Roland195
27th Jul 2011 16:47

Good Reason

I cannot think of a single "good" reason why a client would not want his new advisor to contact his previous accountant.

Alarm bells do not come much louder other than asking if he get's a discount on the fees for cash.

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By Elaine Clark
27th Jul 2011 17:09

Can I ask ...


Can I ask ...   Who would be prepared to risk contravening their professional body’s ethics and guidelines for a client unless there is a good and justifiable reason (other than to just win more work of course)!  Having invested many years in this accountancy career of mine – I think I would have to think long and hard before I decided to take that course of action.  Maybe that’s just me though?


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By Flash Gordon
27th Jul 2011 17:11

Contact the accountant!

Client does not want me to contact the accountant for various reasons (eg He has been with the acct for several years and just prefers no further contact)

Surely you just say to the client 'I'm obliged by my professional body to contact them' and point out that if you can't request the essential info from the accountant then you'll be charging them a whopping fee for all the time that you're going (potentially unnecessarily) to be spending chasing the client for a bit at a time and working everything out yourself? Ask yourself 'would I be p'd off if a new accountant didn't do me the courtesy of at least telling me they'd been appointed?' I would. Like an earlier poster said they might be still racking up chargeable hours and might have big fees outstanding (pretty likely if client is refusing to contact them, how many other reasons are there really for you not being allowed contact? After all its not the client being forced to speak to them, just you.)

I'd be running a mile or getting all my fees upfront and covering my back on everything I did just in case.....

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By ShirleyM
27th Jul 2011 17:41

What reason?

Why doesn't your client doesn't want you to approach his previous accountant? It is really frustrating when you make such statements without explaining them.

I cannot think of any genuine reason, other than they have absconded, or died! (We have experienced both of these situations, but we still tried to get the records).

Is there another good reason?

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By Elaine Clark
27th Jul 2011 17:44

maybe ...

accountant is in prison?

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By Flash Gordon
27th Jul 2011 17:55

In prison...

And then I'm sure they'd appreciate a visit!

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By ShirleyM
27th Jul 2011 18:07


.... or has sacked this client to prevent being put in prison!

FirstTab, you maybe cannot see this, but people here are trying to help you.

You have heard the clients story and decided to take him at face value. Aren't you worried about not knowing the story from both sides?

What if his previous accountant discovered something 'naughty' and tackled your client about it, but the client refused to put things right, and is withholding this information from you? Forewarned is forearmed, as they say! If this is the case you will have to deal with the issue at some point.

Example: we once had a client who had unrecorded sales but he prepared his own VAT Returns (excluding the unrecorded sales). We gave him the information to correct the VAT, but the following year it was clear he hadn't corrected the VAT! To cut a long story short we sacked him, but we informed his new accountant of the problem. We had forewarned the accountant, so our conscience was clear, but nowadays we would be submitting a SOCA report as well.

What if your new client isn't honest? He is hardly going to tell you if he is fiddling the VAT, is he! He may be hoping you will do as he tells you (he's made a good start there!) and hopes you don't look too hard.

What if the previous accountant was the dishonest one? Wouldn't your client want you to know so you can look out for him?

I can't understand your resistance to approaching the previous accountant.

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By Top_Cat
27th Jul 2011 18:12

Ignore ACCA ethics then?


So in this case you would choose to ignore your ACCA guidance on professional courtesy letters? Interesting.



Posted by elainec100 on Wed, 27/07/2011 - 16:24



Just a small, but important point. Ethical guidelines are advisory, they are not legally enforceable.

Whilst professional bodies can advise that you should contact the outgoing accountant, they cannot force you to do so.

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By Elaine Clark
27th Jul 2011 18:17

@Top Cat - of course they are not legal. The courts could be full of accountants if that were the case!

Ignoring them is an action point in a Practice review though.


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By FirstTab
27th Jul 2011 18:40

Regreting asking this

Thanks for the response. I will leave it at this. I am happy with my approach. It has worked so far. I will now move on and not respond ny further. 

I am not as ethical as good people on this website.I will wait for ACCA to remove me from their list.


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By Elaine Clark
27th Jul 2011 18:47

Never ceases to amaze


Never ceases to amaze me when people ask a question and don’t like the answers they get – so ignore them.  Oh well ...


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By ShirleyM
27th Jul 2011 19:10

You're welcome FirstTab

So nice to know everyone's help was appreciated ;(

I still hope it turns out ok for you.

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By Top_Cat
27th Jul 2011 19:23

What purpose do they actually serve ?


Ignoring them is an action point in a Practice review though.



Posted by elainec100 on Wed, 27/07/2011 - 18:17



Do you actually take any notice of practice reviews? I never have and never will.

What people forget is that in practice you are running your own business, and that business has to compete in the real world or go under. A good dose of commercial realism would do a lot of good because anyone ham-stringing themselves by strict adherance to pointless "rules" WILL go out of business. 

If the regulatory bodies don't drag themselves into the 21st century then sooner rather than later they will find themselves marginalised as more and more people decide that membership is a waste of time. 

I'm of an age where I can happily tell them exactly what anatomical miracle I would like them to perform with my membership without any adverse financial effects, but I do see more and more youngsters questioning just what is the relevence of the regulatory bodies and why should they bother handing over a fat fee every year. 


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By Elaine Clark
27th Jul 2011 19:39

old school
I make no apology for being old school on this one.   Yes I run a business and I follow the ethical guidelines of the ICAEW to ensure that we provide a good service to clients. Yes you can provide a good service without doing this or being a member of a professional body or whatever else anyone wants to add. However I do hope that I would never be berated for complying with the directions of my professional body. It would be laughable if that somehow made me a bad accountant or business person.



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By mumpin
27th Jul 2011 19:46

What a bunch of box tickers...

I have to say that I am ACCA and my MO is pretty similar to First Tab's.

If I know the old firm then I will certainly write for Clearance as a courtesy.

There are a couple of firms in my locale who are very dodgy and have a poor reputation with other local professionals. I probably wouldn't write in those instances.

Also I sometimes get clients who are being charged a ridiculous amount by the old accountant - 12 times my fee in one case, and have discovered that and intend to not pay the old accountant or pay them very slowly. In such instances I agree not to write for PC.

I also tend not to write to firms who pretend to be qualified but aren't (you know which organisations I mean) but I will write to non-qualifieds/bookkeepers etc.

I get a certain amount of satisfaction from not doing what the ACCA tell me to do and as I don't hold an auditing certificate I'm not going to get any practice compliance visit.

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By Flash Gordon
27th Jul 2011 20:01

Box tickers or just plain decent?

Also I sometimes get clients who are being charged a ridiculous amount by the old accountant - 12 times my fee in one case, and have discovered that and intend to not pay the old accountant or pay them very slowly. In such instances I agree not to write for PC.

I also tend not to write to firms who pretend to be qualified but aren't (you know which organisations I mean) but I will write to non-qualifieds/bookkeepers etc.

I don't see it as being a box ticker or doing it because ACCA tells me, I do it because its the way I'd want to be treated. Common courtesy, the decent thing, being polite, whatever you want to call it.

I don't care who the outgoing accountant is or what professional body or not they belong to. I'd treat everyone the same. Strangely enough the ones I've had issues with have actually been ex-ICAEW members so I'd not rush to put down other organisations who aren't officially quualified. I'm guessing you're referring to ICPA - I belong to them as well as ACCA because I get a decent deal on my insurance & get CPD and tax books thrown in for good measure. As far as I'm concerned they cost me less and give me far more than ACCA ever have. And since they're providing insurance and cpd I'm not quite sure how they could actually be considered inferior to the likes of ACCA who take your money, give you nothing and don't do anything for their members.

If an ex-client has been charged a 'ridiculous' amount - well they presumably agreed to it in the first place and therefore should honour it. If a new client of mine wasn't paying their previous accountant without good reason they'd be an ex-client very quickly. What goes around comes around and if they're shafting their old accountant you can be sure they'll shaft you just as quickly when they find out that they can get ultra-cheap & nasty somewhere else!

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By Jekyll and Hyde
27th Jul 2011 21:35

to add to the debate, there are more then type of accountant

I have enjoyed reading these posts and have posted more today on AW then previously and therefore I have read several views on lots of issues today. This is actually why I continue to look at posts and post my views even when i know that other people will not approve.

It is clear to me that there may be two conflicting views on several issues

1) accountants provide a service 2) accountants sell a product.

1) accountants are risk adverse 2) accountants are not risk adverse

1) accountant are ethical 2) accountants are commercial

I consider myself to be very risk adverse so will follow most of the ACCA's guidence, I agree with top_cat and that it is my choice to follow the guidelines but it is also others not to follow the guidelines. Neither is right, neither is wrong. Most accountants will fit somewhere in the middle. Some people call me boring, predantic, working for HMRC. others consider me to be trustworthy, passionate and knowledgable.

That is why I also look to engage risk adverse clients, previously I have commented on rouge clients and rouge accountants, but now I understand that this is wrong. They are just not as risk adverse as me and are happy to deal with clients that I would not be happy to deal with, but then also happy to take risk where I would not.  It really is about how risk adverse the client is and how risk adverse the accountant is.  That is how I see this current issue.

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PAH Accounting Devizes Wiltshire
By Phil Hendy
27th Jul 2011 22:33

Must ask for it

 I wouldn't even think about not sending the professional clearance letter. 

You need to ensure that appropriate handover information is obtained, otherwise how do you know the client will give it to you. At the very least it could identify a problem with the client.


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By Top_Cat
27th Jul 2011 22:38

Yes I run a business and I follow the ethical guidelines of the ICAEW to ensure that we provide a good service to clients. .

Posted by elainec100 on Wed, 27/07/2011 - 19:39


But the question is, are you supplying the best possible service to your clients, or, are you supplying the best possible service to your clients within the constraints of some pretty pointless nit picking rules imposed by your professional body. ? 

For instance, let's assume you devise or become aware of a way to save your client a heap of tax.  Lets assume that it is legal (just). Lets also assume that your instiute would consider it "unethical" because, whilst legal, it does involve using loopholes.

Would you give your client the best possible service by helping him to legally save a small fortune?

Or, would you stick to the institutes"ethical guidelines" and let your client pay for your "ethics"?


Remember, if he finds out you could have saved him £1million in tax and didnt, it will be YOU he sues, not your regulatory body.


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By ShirleyM
27th Jul 2011 22:46


.. has taught me to take everything with a pinch of salt.

The potential client tells you their current accountant is rubbish ... doesn't look after them ... submits everything late, etc. etc. etc.

We tend  to know the faults/virtues of the local accountants so can make a pretty accurate guess as to whether the complaints are likely to be true. We sometimes get potential's from unknown accountants, so I do tend to accept the clients version, but with reservations! More often than not, I am sorry to say, the facts don't back up the potential clients version of events. But there are always the ones that catch you by surprise and are genuine complaints, no matter how extreme they appear to be! I really enjoy being able to help these clients and restore their faith in accountants. They also become the most loyal of clients.

How do you know which it is, unless you get the records and look for yourself?


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By Elaine Clark
27th Jul 2011 22:53



Let’s not talk in riddles and what if this – can you be specific please. Can you show me such guidelines that you feel would prevent a professional accountant giving a client the best advice possible but also acting with those guidelines? I often find that hypothetical examples can serve whatever purpose one wants to support – I work on specifics and in my career cannot think of one example that supports your hypothesis.   I am of course happy to be educated by you :-)


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By valentino rossi
28th Jul 2011 10:45

Reasons for getting clearance

As has been stated surely the main reason for requesting clearance is to get copies of the previous years information if nothing else.

Even if you client has retained a copy of the accounts how likely is it that they will have a copy of the tax computation and the capital allowances.

With AIA the fixed assets note is now often very different to the pool that may be left.

It is unlikely that clearance will not be given anyway so I would alwas question why a client asked you not to request it.


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By Steve Holloway
28th Jul 2011 11:17

I think it all helps ....

 to set the right expectation from the outset. Clearance letter, letter of engagement even the MLR checks set an expectation with the new client that you are going to deal with their affairs correctly and that you take the appointment seriously. ANY client that doesn't like any one of these processes can take a hike because experience tells me that (a) They will be lax with their own records (b) They will want you to help them break the rules and (c) They will screw you over in an instant and got to the next sucker accountant on the block.

All three of the measures I have listed are there for a really good reason:

LOE - stops you being sued.

Clearance - you find out if your new client pays his accountant or refuses to declare income

MLR - Crooks like accountants to are enticed by a big fee not to ask questions.

Risk aversion is nothing to do with it and nor is commerciality .... protect yourself, your livelihood and sleep at night has got to be the right call!


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By Chris Smail
28th Jul 2011 11:33

Even if you have no morals or ethics how are you going to do the

 You need to know if there are:-

Losses  especially past capital losses


Pool balances & private use disallowances 

IBA history

Gifts inter vivos



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Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
28th Jul 2011 12:11

Clearance etc

I completely agree with Chris Smail, Steve Holloway and others in that getting clearance (namely the paperwork) plus LoEs etc is essential! I cannot think of any good reason why you wouldn't ask or why a client wouldnt want you to.

If the outgoing accountant doesn't reply, then you have to do your best (some accountants aren't good at replying to PC, sad fact of the profession), but you at least should send the letter. I would be very suspicious of any client who really didn't want me to write to them.

As an interesting aside, we once wrote for PC to an ACCA accountant and received a reply along the lines of "Due to the implications of MLR we cannot comment on matters of professional clearance. However here are the papers etc". This seemed like a warning flag so I called him up for an off the record chat. "Oh, there's no problem with Mrs Smith at all," he said, "She's absolutely fine. We've just been advised by ACCA not to give clearance at all, to protect ourselves."


I found that very bizarre.

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By rockallj
04th Aug 2011 18:10

@ Monsoon

I think the MLR point is an ACCA thing. I think it is worth asking the question and like you say, it gets cleared up "off the record" somewhat by a courteous telephone call. Fair enough.

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