The process of changing accountants

Botany

Forgive me if this post appears somewhere else, I seem to have pressed submit by mistake while typing...

Anyway, the situation is this.

My husband and I have been with the same accountant for almost 4 years. All seemed fine at the beginning but then I started to take an interest in accountancy, tax law etc, and so I started to actually look (and recalculate) the figures produced by the accountant herself. The results weren't pretty. I won't bother you with the details but just to give you a flavour of the last couple of months, I found out she got our Self Assessment calculations wrong (she had omitted to include a large dividend, which she hadn't even included in the company accounts); she advised me to take some money out of the company accounts saying that i could and should do so, but then 3 days later she told me to put the money back into the company accounts; her firm have been overcharging us for 20 months, and when I found out they took 3 weeks to reimburse us and didn't even apologise for the mistake. I could go on. Basically we have lost all trust in them.
About one month ago we received a parcel with the year-end company accounts prepared by them, with a letter asking us to sign and return.
We did not sign and return those, because as I said we now have got to the point where we don't even believe this woman is capable of basic arithmetic, let alone accountancy proper. Rather, we have spent this time locating a new accountant whom we can trust, and believe we have found her.

We would like the new accountant to start as soon as possible and would like her to re-do our company accounts (we do not want to sign the ones the old accountant has prepared, especially as those seem to be incorrect!).

The new accountant has advised us to mail the old one letting her know that we would move to another firm and asking her to provide the new accountant with all the relevant documentation.

The old accountant wrote back saying that she will submit the documents to the new one only after we have signed and returned the year-end accounts to her (old accountant).

We do not want to sign these documents; we don't want to put our signature onto something we don't believe to be correct. However, we don't even want the old accountant to use this as an excuse to stall us (we need the new accountant to be given all that she needs as soon as possible, especially as VAT calculations are due at the end of the month and so time is of the essence).

So here is what I'd like to know:
can my old accountant 'force' us to sign the year-end accounts?
is this stalling tactic widespread? has anyone heard of something like this before?
are there rules/legislation applying to accountants whose clients want to move away, such as a code of conduct which we may refer to in future communications?

Thank you in advance for any advice or comments you may have.

chrismac1

In attempting to get you to sign accounts you believe do not represent a true and fair view of your company's affairs, your accountant is asking you as a Director to break numerous sections of the Companies Act. Depending on the extent of the mis-statements, there could be serious consequences for you.

If your accountant is qualified, merely asking you to do this is inviting a visit from the Disciplinary Panel. It appears you have written evidence of what has taken place which could help to get your current accountant to do the decent thing - IF she is qualified.

This stalling tactic normally occurs only from non-qualified accountants who either don't know or don't care about the Companies Acts. For qualified accountants, there are codes of conduct about how we take on new clients, and how we let existing clients leave us. Anyone worth his or her salt goes above and beyond the codes of conduct, and with one exception (non-qualified) I have found this to be the case in every single new client I have won off other accountants.

Note that normally the new accountant is the one who writes to the old accountant - with your permission of course. I have a standard letter I send for a limited company, a different one for a sole trader, and so on. However if your old one refuses to co-operate point blank do not despair, the new accountant will cope with this OK if you have chosen them well. For example, a local accountant died in April and I inherited 25 or so of her clients - in many cases the records were "somewhere in my old accountant's garage" so you don't get much more incomplete than that. So long as your own record-keeping is decent you'll still get a good set of numbers.

Botany

Thank you Chris.

The firm I'm referring to claims to be a firm of 'chartered accountants'. This does not mean the specific person we have been dealing with in the last 4 years is herself 'chartered' though, does it?

I will write to her again and specify that we have refused to sign the document she sent because we do not believe these to be correct, and will make the point that she cannot ask us to sign something we believe to be a mis-statement. .... let's see how this goes....

I'm also glad to hear that the new accountant could theoretically clear with incomplete records should the old one not co-operate, but surely the old one must co-operate at least towards the 'professional clearance' process?

chrismac1

If she has FCA ACA or similar after her name on the letterhead or letters, she is Chartered and she has already broken the Disciplinary Code. She must also comply with professional clearance. If she is Chartered and you threaten her with complaining to the ICAEW it is odds-on she will change her tune pronto.

sunshinetours

Presumably you are dealing with the firm as a client (letter of engagement) and not contracted to the partner/accountant individually?.
Therefore the firm will be guided by the ICAEW rules which are pretty clear

Your new accountant assuming they are also ICAEW memebers would know this and should advise you how to proceed

One key rule is you cannot withhold professional clearance regardless of fees owed etc. They may be able to hold onto any property of yours if you owe fees however

heretolearn_2

Just to back up what they have all said, no they can't withhold anything until you sign.

They CAN withold original documents etc if you owe them any money.

If you don't, then just move over. Your new accountant will write to them and deal with any problems.

MrRedundant

I think people are getting ahead of themselves here.

The old accountant prepared the accounts as you didnt let them know not too; this is chargable work and from what I can tell you haven't raised the issues you have with the accounts in order for them to resolve them. As it stands you do owe the money as the work was done. Just because you are moving due to past issues doesnt give you reason to avoid the debt.

I would write back resolve any issues you have with the accounts; sign them and settle your bill and problem solved.

heretolearn_2

Well yes, obviously you owe them for the work done, even if you want to go elsewhere to get it re-done. This is galling if you feel that they haven't done a good job, but it's not worth arguing over. They can hold on to your documents until you pay.

But you should NOT sign accounts you feel are inaccurate. That doesn't stop you paying and moving on.

TM1976

I can't really see why the old accountant would care if you sign the accounts. What they definately will want is for you to pay their bill for the work done, which I suspect is what this dispute is about.

As this is a money saving forum I would say that getting the new accountant to prepare accounts from scratch is definately a waste of money as the most they need to do is review the previous accountant's work. I can't imagine a situation where the working papers were so bad that this couldn't be done.

Botany

OK I did not expect this amount of interest in our situation!

Just to clarify and update:

-I have since told the old accountant in no uncertain terms that we will not be signing the accounts. I do not know whether these accounts are 'so bad' that they justify the cost of having them re-done, but my husband and I have lost all confidence in the old accountant due to a number of episodes where she demonstrated little or no competence. By getting the new accountant to re-do the sums we are in effect paying for peace of mind.
This may not be very money-saving, I admit, but we are a very very thrifty family in every way and so if on this special circumstance we have decided to 'splash out' paying double for our accounts I don't see this as being a big deal. Also, and hopefully, this will be a one-off because I would very much like the relationship with the new accountant to be a pleasant and long-lasting one.

-We do not have any sort of debt with the old accountant; we have been with her for almost four years and have always paid monthly in advance and always, always bang-on time. In fact, until a couple of weeks ago, we were creditors (!) of our accountant. This was because I found out that she had been overcharging us for at least 20 months. She has paid some money back to us but by my calculations she still owes us a little cash. Once again though, we are happy to take a little loss for peace of mind.

When I talked to her after I received the first answers to this post she mumbled something along the lines of being too busy to send the documentation over to the new accountant. As always, she was evasive and unclear. In any case, no outstanding fee was mentioned (there isn't any), only that getting the documents together is going to take her a week because she is so busy.

How long can it take to grab a file, pick out a bunch of pages and put them in an envelope?

My interpretation is that she is so messy and unorganised that really getting hold of the papers the new accountant requires is going to be a feat. This is after all the woman who asked me (someone with no accountancy qualifications whatsoever) to help her with some calculations because she wasn't sure if she was adding things properly. Really. I would find this very funny if it ad happened to someone else, but it happened to us so I'm not laughing...

My concern is that this person, this master of procrastination, will mess me and the new accountant about by delaying these documents. This is a concern because VAT is de soon and so the new accountant needs to have a chance to get up to speed sharp-ish.

In any case, I will come back to this thread and let you know if and when these documents are transferred....

bridgend_girl

if your new accountant is reputable and efficient then they will deal with old accountant once you sign a letter of engagement with them. They will also deal with companies' house, inland revenue and the vat people.

Whatever you do, do not submit your vat return late, make sure your new accountant knows when your vat return is due and ask them their advice.

If your new accountant seems to be not dealing with this transition from your old accountant well then perhaps you need to reconsider whether they are suitable. Ask friends etc to recommend a good accountant - all firms are not the same and you don't necessarily get what you pay for.

( i have 10+ years practice experience)