Rise in bogus accountancy services?

Is there a recent spikes in self made accountants that are not fit for the job?

Didn't find your answer?

I can't be the only one to notice that recent there is a boom of accountants that give bad advice and are utterly unfamiliar with the legislation.

Just got a call from a prospective client looking for an accountant, they plan to strike off (voluntarily) their LTD. They got an advice from a professional (paid) accountant that it's not possible to close their LTD earlier than the company AP (which is is December). On asking the question can't it be shortened to say June and close it earlier the answer was: "No, AP can't be less than 12 months and can't be shortened before you close it".  Then "after that, it takes 6 months to strike off the company" (of course it takes around 2 if everything goes well).

Another client of mine was complaining as of why he's paying 26.5% tax on profits above 50k when the tax rate is 19% (from their recent CT600). Pointing him to the relevant legislation didn't help, they got an "advice" from another accountant that the tax rate is 19%.

 

Replies (34)

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RLI
By lionofludesch
02nd May 2024 16:44

You only have to read some of the questions from daft ha'porths on this very forum to realise this.

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Replying to lionofludesch:
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By bettybobbymeggie
02nd May 2024 20:58

lionofludesch wrote:

daft ha'porths.

Did you have me in mind when you wrote this?

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By ireallyshouldknowthisbut
02nd May 2024 16:46

They have always been around, but it seems somewhat enabled by the utter lack of any sort of basic checked by HMRC and Companies House which means your can go on and one doing a really bad job and no-one really notices if you only service clients below HMRC's radar

There also seem to be a whole cohort of 'accountants' who have been 'trained' in a large data driven enviroment with minimal checking or scutiny who probably dont know what they are doing is total bobbins and just rely on what drops out of the system.

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By Matrix
02nd May 2024 16:58

Unfortunately it makes the capable ones really busy.

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DougScott
By Dougscott
03rd May 2024 00:35

I started in 1980 and I think thick accountants have always been about.

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Replying to Dougscott:
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By Paul Crowley
03rd May 2024 15:36

Agree
Nothing new here.

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By bernard michael
03rd May 2024 09:24

I've heard that pub trade has increased with additionl MDTP offering their services

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Stepurhan
By stepurhan
03rd May 2024 10:42

I think they have always been out there. Technology has just made them more obvious.

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By lordofsums
03rd May 2024 12:17

Too many examples I can list.... so in summary, they have always been around

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By Yossarian
03rd May 2024 12:28

Not that long ago I took a client from another accountant (supposedly AAT qualified) who was still making reference to the FRSSE in company accounts. It made me wonder whether he was either using software that was years out of date, or hand-typing the accounts on an ancient template.

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Replying to Yossarian:
Melchett
By thestudyman
06th May 2024 01:07

I’ve seen more than my fair share of references to Inland Revenue on this forum when trying to hint at HMRC. Quite peculiar given it’s been an age since it was last called that.

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Replying to Yossarian:
Flag of the Soviet Union
By thevaliant
06th May 2024 09:50

Caseware accounts production still has references to FRSSE in its software!
It doesn't appear on the accounts anywhere, its usually 'guidance' text but the fact that ten years since the end of FRSSE it still shows up just shows that it can also be software houses who aren't bothering either.....

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By FactChecker
03rd May 2024 12:57

There have always been a few 'bad eggs' scattered amongst those who are trying to run before they can walk and those who've forgotten almost as much as they once knew ... but I haven't noticed a rise in *bogus* accountancy services.

Spoiler alert: the following will wind-up a few people, but that's not my intention ...

What I observe (and not just within Accountancy) is a unwillingness (or inability?) amongst many of those under c 30 to ever admit that the answer to a question addressed to them may truthfully be "I don't know".
As an alternative, some half-baked 'answer' is vouchsafed (without any concern as to it's validity in general let alone to the context before them) ... and then the die is cast.
Because apparently the one thing worse than admitting you don't know the answer is to admit that you may have given the wrong one ... the defences go up / they double down on a newly found certainty / and 'are you calling me a liar' tactics commence!

Wiser heads have no problem in saying that they're not sure (that's an interesting / unusual question ... I'll need to check with one of my colleagues etc) or simply don't know (that's not really my area ... can I recommend you to etc). Client is happy, you may actually increase your knowledge and no 'front' has been lost.

Many on here experience this 'syndrome' with horrifying regularity if they actually manage to speak to an HMRC operator - and I encounter it also with banks, the NHS, and many other organisations on a daily basis.

The problem is that *I* have the time and (diminishing) patience, albeit through gritted teeth, to cut my losses and try again ... until I reach someone (probably 50+) who either knows the correct answer or will at least call me back when they've got it.
BUT if you're an unrepresented taxpayer seeking assistance, the lure of cheap prices can hook you - and then it's too late because you've received false assurances.

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Replying to FactChecker:
DougScott
By Dougscott
03rd May 2024 13:24

I think you've hit the nail on the head there Factchecker. It's a lack of morality in today's youth - pretending you have the answer when you don't is simply lying and unethical.

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Replying to Dougscott:
By ireallyshouldknowthisbut
03rd May 2024 14:22

Dougscott wrote:

I think you've hit the nail on the head there Factchecker. It's a lack of morality in today's youth - pretending you have the answer when you don't is simply lying and unethical.

It was always thus.

The oldens moaning about the youngens lack of somethign or other, and they the youngens become the oldens and complaining about the youngens.

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Replying to FactChecker:
Stepurhan
By stepurhan
03rd May 2024 15:11

Knowing when you don't know an answer, and being ready to admit that to others, is one of the most undervalued skills around.

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Replying to stepurhan:
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By bernard michael
03rd May 2024 15:22

stepurhan wrote:

Knowing when you don't know an answer, and being ready to admit that to others, is one of the most undervalued skills around.


but then still charging for the advice is a better skill
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Replying to stepurhan:
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By Arbitrary
07th May 2024 15:58

Isn't knowing what you don't know supposed to be the beginning of wisdom? Socrates/Plato?

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Replying to FactChecker:
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By Paul Crowley
03rd May 2024 16:22

+1
I was spouting on about that to my AAT sister just ten minutes ago. (Not her the one at fault).

Saying that the question is a good one and I will research it, is more likely to make the client feel unique and special, and that I will spend the time to research means that I value the client.
I have never worried about not being able to instantly answer. Never had any grief from it.
But I have heard lots of people give wrong answers on the phone.

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Replying to FactChecker:
By SteveHa
03rd May 2024 16:27

FactChecker wrote:

What I observe (and not just within Accountancy) is a unwillingness (or inability?) amongst many of those under c 30 to ever admit that the answer to a question addressed to them may truthfully be "I don't know".

I must be old. I will openly admit where I don't know the answer of the top of my head. However, I do know where the answers are (and that is a skill I find lacking a lot).

None of us needs to know everything. We just need to know where to find what we need to know.

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Replying to FactChecker:
Tornado
By Tornado
07th May 2024 16:19

The more creative online advice is -

'I am sending an email to my colleagues in another department and they will get back to you within the next few days'

It is amazing how many people can lie to you with ease and think that you do not know they are lying.

You can't really trust anyone these days. :-(

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By Roland195
03rd May 2024 14:31

As much as I would love join in the complaining about the decline of society in general and the profession in particular with a side order of denouncing the youth of today, the examples quoted by the OP are hearsay and not so egregious to amount to "bogus" accounting services (unless the OP is a character from an 80's film set in California).

The time frame for closing down a company is probably closer to 6 months rather than the 2 month gazette notice in total.

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Replying to Roland195:
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By cayol
03rd May 2024 15:05

Roland195 wrote:

The time frame for closing down a company is probably closer to 6 months rather than the 2 month gazette notice in total.

From DS01 it's 2 months. It can be up to 6 if you have to wait 3 months after ceasing trading

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By SteveHa
03rd May 2024 16:12

I started my career in HMRC in 1982. There were good, bad, and utterly useless back then. (Some were probably ugly, too, but I'm not so sure aesthetics matter).

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Replying to SteveHa:
paddle steamer
By DJKL
06th May 2024 11:14

https://www.youtube.com/watch?v=WCN5JJY_wiA

Have not watched for years, I think a catch up is on the cards. (Shame I am stuck here on a Bank Holiday)

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Replying to DJKL:
By SteveHa
07th May 2024 17:38

I bet Lee Van Cleef wasn't too happy with that when he found out which one he'd be.

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By I'msorryIhaven'taclue
06th May 2024 11:07

It's hardly surprising that somebody enterprising who works poorly paid at a practice will strike out on his/her own.

After all, if Joe Public can prepare his own accounts and complete his own tax return, CIS returns, Xero bookkeeping and so on then why shouldn't accountants' staff! I see their logic.

Among our recent howlers inherited from previous "accountants" are:
Statutory company accounts prepared without accruals or prepayments, not even for the accountancy fee;
Client with £100k t/o had £83,333 t/o entered to tax return and told there was no need to VAT register as the t/o was sub £85k;
Bookkeeping software trained to claim 20% input VAT on most expenditure - input VAT claimed on dozens of non-registered contractors, client's SA payment, and even on quarterly VAT payments to HMRC!

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Replying to I'msorryIhaven'taclue:
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By Ian_mcdonald
07th May 2024 10:30

"Statutory company accounts prepared without accruals or prepayments, not even for the accountancy fee"

That's reminded me of something I was always confused about decades ago when I was working. Am I correctly recalling that our auditors stopped us accruing for their accountancy/audit fees because the work for year "n" was done post year-end in "n+1"?
Am I imagining things or was this a "thing" for a while?

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Replying to Ian_mcdonald:
paddle steamer
By DJKL
07th May 2024 10:41

Never with us- whilst we might have conducted most of the work post year end (though not all, I did a few where we did stocktakes etc pre year end a rolled forward) the work related to the accounts year-SSAP2 matching concept.

In my experience partners liked their audit fees accrued, effectively they could point out to clients they had previously advised the fees when the finally passed them out,

"As you can see I have managed to restrict our audit fee to the sum previously advised to you at our previous close out meeting" near fait acompli if in ball park original quote.

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Replying to Ian_mcdonald:
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By Paul Crowley
07th May 2024 12:45

That is just plain wrong.

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Replying to Ian_mcdonald:
RLI
By lionofludesch
07th May 2024 13:00

It's a view which has a following but not one to which I subscribe.

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Replying to Ian_mcdonald:
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By Arbitrary
07th May 2024 16:02

Like that thing with aeroplane repair accruals perhaps.

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Replying to Arbitrary:
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By tom123
08th May 2024 07:24

And re-lining the bricks in the blast furnace - or was that the other way?
--never really did like law--

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Replying to Ian_mcdonald:
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By Arbitrary
07th May 2024 16:02

Duplicate. Sorry.

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