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Tipping Off?

Has the new Accountant potentially tipped off?

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6 months ago we disengaged a client and submitted a SARS report.

This week we received a Professional Clearance letter which we responded to using the very precise language prescribed by our Accounting Body.

We told the new accountant that we'd just require an email from the ex-client saying they are happy for us to share details with the new accountant, the new accountant (CIMA) seemed to not even hesitate and actually forwarded our entire professional clearance response to the client (as a way of getting them to respond to us).

Does the email being forwarded by the new accountant to the client amount to tipping off?

Replies (41)

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By Wanderer
10th Dec 2021 18:05

Did you tell the new accountant that you had submitted a SAR?

What was the wording connected with this that was in the email they forwarded to the client?

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RLI
By lionofludesch
10th Dec 2021 18:17

If you just asked for permission from the client to reply, surely you didn't disclose anything, let alone the SAR, to the incomer at that point ?

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Replying to lionofludesch:
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By Self-Employed and Happy
10th Dec 2021 18:38

No.

We didn't disclose anything to the incoming accountant!

We expected them to simply ask (by phone or separate email) the client to contact us saying "yes please go ahead and share my records etc with the new accountant"

We did not expect them to forward our Professional Clearance response to the client / cc'ing us in as well.

Although very very unlikely the client would know / understand, the wording used when responding to a clearance letter of a client you have reported is slightly different, this is designed to alert the new accountant that they potentially would like to ask more questions of the client / alert them that something else could be worth considering before taking on the client.

If for example the client was a solicitor / had knowledge of how such wording is used, by forwarding it to them they may well be "tipped off", therefore the fact the client in question is not a solicitor (for example) should not matter?

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Replying to Self-Employed and Happy:
RLI
By lionofludesch
10th Dec 2021 18:44

Self-Employed and Happy wrote:

No.

We didn't disclose anything to the incoming accountant!

We expected them to simply ask (by phone or separate email) the client to contact us saying "yes please go ahead and share my records etc with the new accountant"

We did not expect them to forward our Professional Clearance response to the client / cc'ing us in as well.

Although very very unlikely the client would know / understand, the wording used when responding to a clearance letter of a client you have reported is slightly different, this is designed to alert the new accountant that they potentially would like to ask more questions of the client / alert them that something else could be worth considering before taking on the client.

If for example the client was a solicitor / had knowledge of how such wording is used, by forwarding it to them they may well be "tipped off", therefore the fact the client in question is not a solicitor (for example) should not matter?

If you've disclosed nothing then neither have the incoming candidates.

But it sounds to me like you've disclosed that you've submitted a SAR.

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By Calculatorboy
10th Dec 2021 20:39

Sounds like you've shot yourself in the foot if the wording of the reply to a professional enquiry implies a SAR. Its an ex client..move on

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Replying to Calculatorboy:
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By Self-Employed and Happy
11th Dec 2021 08:47

…..”move on”

We disengaged them 6 months ago, unless you missed that I’d say that is the very definition of moving on.

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Replying to Self-Employed and Happy:
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By Calculatorboy
14th Dec 2021 00:51

And then you spend time gossiping about ex clients here ..

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By Paul Crowley
10th Dec 2021 20:55

I consider the forwarding of the reply to client to be inept and unprofessional
The sort of thing I expect from an unqualified bookkeeper.

These so called clearance letters arose from changes in auditor and were driven by the need of new auditor to be made aware of the thing that old auditor found being available to new auditor.

Why else would the start be "Do you know of any reason........"?

Unfortunately so many have such a lack of knowledge that they now become a risk to the outgoing.( A bit like giving an honest employee reference)
As such I now only give even the slightest of hints (good luck with...) to members of my own professional body

I ignore any question regarding payment of fees unless there is an existing fee that is unpaid.

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Replying to Paul Crowley:
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By Calculatorboy
10th Dec 2021 21:53

But the ICAEW code of ethics say not to mention SARs or say anything that might be interpreted as tipping off because "incoming might share with client."

Even with a few difficult (ex) clients ( that tiny minority you would'nt flinch seeing in front of a firing squad) I always write cold matter of fact replies to enquiries and just complerely ignore requests for details of SARs as the Overlords recommend.. bear in mind you never know who your reply might be disclosed to.

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Replying to Paul Crowley:
RLI
By lionofludesch
10th Dec 2021 22:21

Paul Crowley wrote:

I consider the forwarding of the reply to client to be inept and unprofessional

Maybe there's a case for replying in a proper letter. Much less likely to be forwarded anywhere, imho.

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Replying to lionofludesch:
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By Paul Crowley
10th Dec 2021 23:20

Did that with the last good luck letter
I even said that the client chose not to accept my advice
But who knows? Perhaps they had reason not so to do

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By Tax Dragon
10th Dec 2021 22:46

Calculatorboy wrote:

But the ICAEW code of ethics say not to mention SARs or say anything that might be interpreted as tipping off...

Code of ethics.
Common sense.
Maybe even the law.

But OP did say words used had been provided by the institute. So something here not adding up. (You probably spotted that already, Calculatorboy.)

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Replying to Tax Dragon:
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By Paul Crowley
10th Dec 2021 23:37

I once remember as a school governor the Head being very proud that there was a secret code that Heads used when writing references
I thought at the time that any such code is clearly available to all who wanted to find out
And if you have a member of staff that you choose to warn next employer of then you are likely to have that employee for ever

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Replying to Tax Dragon:
RLI
By lionofludesch
10th Dec 2021 23:36

Tax Dragon wrote:

Code of ethics.
Common sense.
Maybe even the law.

But OP did say words used had been provided by the institute. So something here not adding up. (You probably spotted that already, Calculatorboy.)

I would probably have merely written to the client asking for written permission to reply as my opening salvo.

At that stage, I don't see the need for precise Institute-recommended blurb.

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Replying to Tax Dragon:
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By Self-Employed and Happy
11th Dec 2021 08:45

There’s nothing “not adding up”

The exact words were used, anyone with the slightest attention to detail will notice the wording is subtlety different to the normal responses to such letter.

My question was not in any way shape or form because I’m “concerned” I have done exactly what my Chartered Accounting body has instructed.

My only concern was the forwarding of the email, which as someone else has said is unprofessional etc but I was concerned the was a tipping off possibility (although tiny).

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Replying to Self-Employed and Happy:
Stepurhan
By stepurhan
13th Dec 2021 08:59

Self-Employed and Happy wrote:

The exact words were used, anyone with the slightest attention to detail will notice the wording is subtlety different to the normal responses to such letter.


Does your ex-client see a lot of these letters. enabling them to see the "subtle" difference?

You keep saying you used the "exact words" recommended by ICAEW. Why not share the wording you used so we can judge if it is likely to be tipping off. Unless you do that, the suspicion you said more than you should in your response is going to linger.

I strongly suspect you are worrying about nothing, because no non-accountant will know what your choice of wording means.

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Replying to stepurhan:
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By Dib
13th Dec 2021 14:12

I would!

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By paulwakefield1
11th Dec 2021 08:29

If you used the professional body wording then that cannot be tipping off (unless they have fouled up their guidance) so I don't see how the incoming accountant can have tipped anybody off. If you mentioned to the incoming accountant that you had submitted an SAR then you probably both have a problem.

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Replying to paulwakefield1:
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By Tax Dragon
11th Dec 2021 08:59

That's the point I was trying (but obviously failed) to make.

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Replying to paulwakefield1:
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By Self-Employed and Happy
11th Dec 2021 09:25

Zero mention of SAR as that would be tipping off!

My concern surrounded what an earlier reply described as “headteachers secret language” which when using the prescribed language provided is supposed to “peak the interest” let’s say of the new accountant.

By the incoming accountant forwarding the email are they are opening up the possibility that the client could be tipped off?

That is my only question.

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Replying to Self-Employed and Happy:
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By Calculatorboy
14th Dec 2021 00:54

No reason why your letter shouldn't be disclosed to client

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By paulwakefield1
11th Dec 2021 09:48

Tipping off is saying an SAR has been made or that an investigation is under way.

It sounds as if you have been sticking to prof body guidance i.e. sticking to facts about what has happened and what needs to happen. And presumably have said nothing that you would not have already said to the client anyway.

I can't see there is any tipping off. Edit: The only way that forwarding the email would be tipping off is if you had tipped off the accountant - you can't tip off one without the other.

Maybe David Winch will pitch in and put your mind at rest.

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Replying to paulwakefield1:
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By Paul Crowley
12th Dec 2021 14:24
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Replying to Paul Crowley:
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By paulwakefield1
13th Dec 2021 14:30

And now also below

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By Truthsayer
11th Dec 2021 11:44

This post makes no sense. If all you did was 'We told the new accountant that we'd just require an email from the ex-client saying they are happy for us to share details with the new accountant', then how can that be tipping off? Are you not telling use the full story? What exactly did you say?

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Replying to Truthsayer:
RLI
By lionofludesch
11th Dec 2021 11:55

Truthsayer wrote:

This post makes no sense. If all you did was 'We told the new accountant that we'd just require an email from the ex-client saying they are happy for us to share details with the new accountant', then how can that be tipping off? Are you not telling use the full story? What exactly did you say?

Thanks for saying this. I thought I was alone in not knowing what the problem was.

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Replying to Truthsayer:
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By Self-Employed and Happy
11th Dec 2021 16:00

Usually we say something like “we know of no professional reasons you cannot accept this engagement”

For this we used (as advised)

“So far as our ethical and legislative requirements allow, we have no reason why you should not accept the engagement” then we asked the client give us permission directly to share information etc.

My question was purely based on the new accountant forwarding the response, we have not “tipped off” however an accountant should know that certain worded responses may elicit extra questions to be asked before deciding if they should engage.

My whole point was around the new accountant forwarding on this response.

I’m not really sure how people on here have seemingly made it quite so difficult.

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Replying to Self-Employed and Happy:
RLI
By lionofludesch
11th Dec 2021 16:33

Self-Employed and Happy wrote:

Usually we say something like “we know of no professional reasons you cannot accept this engagement”

For this we used (as advised)

“So far as our ethical and legislative requirements allow, we have no reason why you should not accept the engagement” then we asked the client give us permission directly to share information etc.

My question was purely based on the new accountant forwarding the response, we have not “tipped off” however an accountant should know that certain worded responses may elicit extra questions to be asked before deciding if they should engage.

My whole point was around the new accountant forwarding on this response.

I’m not really sure how people on here have seemingly made it quite so difficult.

Because I wouldn't have replied at all until I had the client's permission.

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Replying to Self-Employed and Happy:
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By Calculatorboy
11th Dec 2021 21:22

With respect the icaew never advise..they tell you to take professional legal advice at your own expense

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Replying to Self-Employed and Happy:
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By Truthsayer
12th Dec 2021 11:04

Well, you have made a complete dog's breakfast of this, and by the sound of it you have been doing it all wrong for years! You should initially not respond at all to a professional enquiry other than to say you have received it and will respond in full once you have obtained permission from the client to disclose. Without that permission you should NOT have said 'So far as our ethical and legislative requirements allow, we have no reason why you should not accept the engagement'. Another thing; it is not for you to say whether the incoming accountant should accept the engagement. There is no such thing as 'professional clearance'. Your job is merely to bring to the attention of the new accountant matters which might affect his decision as to whether to accept the appointment.

p.s. 'For this we used (as advised)'...who advised you to use that wording?

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Replying to Self-Employed and Happy:
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By Paul Crowley
12th Dec 2021 14:31

Yes, I see your point.
Logically you replied to the dopey accountant, any tipping off really is by the dopey accountant not understanding the subtle difference.
But client probably would not notice.

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By JD
11th Dec 2021 16:59

As others have said unprofessional to forward only. Do you have a ''not to be forwarded'' comment in your standard disclaimer at the bottom of your emails.

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Replying to JD:
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By Self-Employed and Happy
11th Dec 2021 17:15

We do not, just the (probably standard) “intended solely for the use of the addressee”

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By Tax Dragon
11th Dec 2021 20:01

"So far as our ethical and legislative requirements allow, we have no reason why you should not accept the engagement"

I thought that was the standard words - it's what we always say. (Unless of course we have a reason they shouldn't accept the engagement.)

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Replying to Tax Dragon:
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By Truthsayer
12th Dec 2021 10:57

What body are you a member of? It is completely wrong for an ICAEW member to reply thus, as it is not for the outgoing accountant to tell the incoming one whether the latter should accept the appointment.

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Replying to Truthsayer:
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By Paul Crowley
12th Dec 2021 14:40

Agree
Not what we write
"We know of no reason why........"

Could the following put new agent in a challenging position?
No idea as cannot recall ever getting one in those words
"So far as our ethical and legislative requirements allow, we have no reason why you should not accept the engagement"

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Replying to Truthsayer:
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By Tax Dragon
13th Dec 2021 16:28

Truthsayer wrote:

it is not for the outgoing accountant to tell the incoming one whether the latter should accept the appointment.

Those words no more do that than they do tip anyone off about anything.

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Replying to Tax Dragon:
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By Paul Crowley
14th Dec 2021 01:12

Given the varieties of wording I doubt anyone would consider client Tipped off

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By Calculatorboy
11th Dec 2021 21:08

I think the OP is acting bit like a divorcee.....remember it's not personal..its just an ex client ..get rid ASAP

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David Winch
By David Winch
12th Dec 2021 18:09

To answer the OP's question, "Does the email being forwarded by the new accountant to the client amount to tipping off?" we need to answer two other questions:
1. By forwarding the email does the new accountant disclose to the client that a Suspicious Activity Report has been submitted?
2. If it does, does the new accountant know or suspect that by forwarding the email (and disclosing to the client that a SAR had been made) he is likely to prejudice any investigation that might be conducted following the submission of the SAR?
If the answer to both questions is 'Yes' then the new accountant has committed a tipping-off offence.
Based on what I have seen in this thread I do not think a tipping-off offence has been committed.
David

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By TASG
14th Dec 2021 15:07

All a bit ridiculously nudge nudge wink wink - I would never go there, wish anyone luck, make off the record phone calls - just not professional.

Legacy of a a professional clearance system which predated modern AML and confidentiality considerations. ICAEW please reform it.

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