Dispute!

System

I have agreed to take on a client who has a dispute with his old accountant.
Can anyone tell me if his old accountant can hang on to the completed 2004-05 accounts as payment is in dispute (extremely long story)? I will need these to complete his SA. My client has been promised a copy but as yet to no avail.
My concerns are:
1. Is it ethical to hold back information and can the accountant do this(considering the dispute has not reached a satisfactory conclusion yet)?
2. How will IR view this if the SA is not submitted by January (other than the usual fine will they consider the circumstances)?

The dispute has been on going since February and although some compromise has been reached the accountant has still not looked into all the issues concerned and appear to be dragging their feet on this matter.

I realise that diplomacy and tact is required when I approach the company but am not sure what I can do if they refuse to co-operate?

Thanks

Sharon

System

Re:Dispute!

Hi Sharon

I'm affraid the long and short of it is that the previous accountant is well within his rights to with-hold records if he has work in progress still outstanding.

Although...

Your client would have been given a letter of engagement at the start of the appointment and the ins and outs of the contract bewteen the accountant and your client should be in that.

Let you client know this and ask him to review the letter.

Although than that i'm affraid he'll have to pay to have his records returned and the revenue won't see this as excusable for late submission. There is still plenty of time.

Regards

Dean

System

Re:Dispute!

Thanks Dean, well at least that's cleared that up.
The main problem is that the company increased their prices considerably without informing my client.
The other problem is that the accountant who dealt with my client has since left and has left several dissatisfied clientel with this same problem.
I will ask my client for a copy of the agreement.

Regards
Sharon

System

Re:Dispute!

Ask for a breakdown of the timesheet? See how the bill has been made up?

Regards

Dean

System

Re:Dispute!

Another thought - does the client hold the source documents that made up the 04-05 accounts? If so, would it be cheaper for you to re-do them, though I suspect that it would cause lots of probs as you would not have the working of how any of the balance sheet items were made up - probably bad idea

Explain to client that they need to get things "sor'ed" with old accountant and move forward. I'm sure that the accountant wants their money and client wants SA done, so there must be room for maneouvre.

PS - I would also hang onto documents until I was paid as well

Claudia

System

Re:Dispute!

Accounants can have a lien over books and records belonging to a client held by them until disputes are solved. These liens are in the various Chartered Institute's Members Handbooks and in the main Accountants who are members of the Institute's are well within their rights to hold onto books/records/information pertinent to a client's accounts until payment is received in full. These liens are also governed in English Law as they, in effect, form part of the Contract between client and firm. A firm has to be bound by guidelines issued by its governing Institute and a sentence referring to the same is included in the standard Letter of Engagement.

Disputes relating to the fees charged by accountants are a common issue between Accountant -v- Client but is not an issue insofar as the Revenue are concerned. If the dispute cannot be resolved the most common solution is to have the work/fee reviewed by the Institute's Arbitration Panel though there are fees involved (on both sides) to have the file reviewed. Usually most disputes are resolved amicably.

Regards
Steve

System

Re:Dispute!

Unfortunatley the accountant has everything
but I have spoken to my client today and have suggested that they both need to reach an agreeable compromise in order to move on.
As for a letter of engagement the client has never had one in the 15 years he has used the accountant.
The original accountant sold the business to a small chain which took my clients books on but even then there was no letter or contract raised then.
This has been ongoing since last November and although I want to remain neutral in this matter I do think that the accountant has not addressed all the issues and in fact may not even know the answer to one particular issue which goes back to the original accountant.
I have urged my client to try to resolve this amicably and have also suggested that he sets a deadline for a timely response.

Thanks everyone
I'll keep you posted!!

Sharon