One newly qualified accountant posted on Any Answers about how fastidious practitioners should be with their clients concerning errors and misstatements in their records.
StreamsofWhiskey said issues he has encountered are errors arising to poor record keeping, clients having no receipts for large amounts of money and claiming something is a business expense when he knows it's not allowable.
He also asked whether "allowing such expenses is just a pragmatic part of running a successful accountancy firm"
"No firm would be able to compete commercially if they were to insist that all rules were stuck to as they would not be able to keep a sufficient number of clients?"
AccountingWEB members shared the approach they take to clients in such instances.
Some accountants said that the occasional error was okay, but when it's obvious to you, the error should be examined and corrected before being submitted.
And as David Winch points out, there are many clients who are convinced they are correct, for example, insisting something is classed as a business expense. Therefore on't be too hasty to make a Money Laundering report.
There are those, on the other hand like Flash Gordon, who said they are very strict with clients.
Chastising clients for trying to slip business expenses through when they are not, means that they learn fast and don't do so again. And if you educate them in the first place then they are less likely to do so.
"If I'm sure I'm right, I'll omit them and tell the client what I've done. Decent clients take advice, dodgy ones aren't welcome," they said.
This is in your best interests, Frankfx argues, as despite clients disagreeing with apparent unfairness, your training and expertise means you know best.
Educate them from the outset and don't go down the slippery slope of letting your standards slide.
Mrme89 agreed. Flouting the rules and laws to make your firm appealing for those who will try to get away with things, is not a good idea. If clients don't want to stick to the rules even after you've educated them, you need to question whether you really want to work for them.
Shirley M's practice questions everything that may be for private use and also checks the VAT. They then list mistakes, tell them how to adjust the next VAT return and check it's been done next time around.
In addition, Moonbeam said that when taking work on from previous accountants, they notice things they would object to. If there is something, be clear with the client and point it out to them.
They also get every client to sign a letter saying they have told Moonbeam all they need to know.
"Not everyone is as pedantic, but if you get HMRC asking tough questions, it will put the spotlight on your practice in a way you’ll regret."
Move to a more ethical firm
If your firm or partners are letting standards slip and letting things go in a way you're not comfortable with, consider leaving.
StreamsofWhiskey said they were happy that there were accountants out there who stick to the rules, but that they know there are some out there who hadn't responded to the post likely to bend the rules.
They added that they'd like to move to a larger firm which maintains a higher ethical standard. But members replied that just because a firm is large, doesn't always mean it's ethical.
According to I C Day, as accountants gain experience, they learn that there are a lot of grey areas with no "hard and fast rules".
"Don't even expect all tax officers to have the same opinions, they don’t. You need a pragmatic approach and assess each case on its own merits."
Don't let clients exploit you
Adam.arca said that his firm mentions in its certificate that accounts were prepared from records provided. Therefore there is a pull for not wanting clients to think even more than currently that their job is to check everything.
Don't go seeking out errors, is therefore his approach. But if something pops out don't ignore it.
What's your approach to client errors? Do you let some slide, or go through accounts with a fine tooth comb to make a note of every little scruple?