Unprofessional Conduct - when to report

Phil Rees

A client has engaged another accountant to act. We have answered the standard letter from the new man and supplied detailed supplementary information. Subsequently he demanded that we do more work in connection with VAT errors by the client which we had adjusted for when preparing the accounts, including more detailed analysis to ensure that there were no further errors (ie by the client). When we replied that we were not responsible for the errors and thus we were under no obligation to do any more work in that respect he threatened to report us to the AAT. Our response to that was to repeat that they were errors by the client and not something that we can be expected to do any further work on without payment.

Today we have received a letter stating "The company's tax file is the property of the client" and demanding that we provide it. Unless something has changed recently this is incorrect. The tax file is legally ours and, whilst we have a responsibility to provide copies of documents that may reasonably be requested, it remains our property.

These two totally unreasonable demands made by the successor appear to constitute attempts at bullying, which brings the profession into disrepute. Are we right and should we report him to his regulatory authority (which is not the AAT)?

burg

I'm not 100% but it certainly sounds like thy have an agenda.

My advice is speak to the AAT ethics team and get their advice.

deanshepherd

They are probably trying to make themselves look good to your former client by making out that your work has in some way been deficient.

I would be tempted to copy your old client in on a response to their last email stating something along the lines 'All VAT errors that we were able to identify have been highlighted to the client and adjusted properly in accordance with the law. We are happy to be re-engaged to conduct a further review but presumably this now falls within your remit as their new accountants. We are happy to assist in any way we can but will not be bullied into doing the work for you.'

As for the tax file, they have a point. All items that are prepared by you as 'agent' rather than 'principle' do belong to the client and you should provide copies at your clients request. Basically this means no working papers but certainly any correspondence to and from HMRC and any filed forms. I keep a separate tax working papers and tax agent file on our system just in case such a request comes in.