Professional clearance letters

5.9 Changes in a professional appointment

5.9.1 Clients have the right to choose their professional advisers, and to change to others if they wish. Members engaging in practice have the right to choose for whom they act. Nevertheless, it is necessary in the interest of both the public, and the existing and prospective advisers, that a member who is asked to act by a prospective client in respect of a recurring reporting assignment, accounting services, or taxation compliance work, should communicate with the existing appointee. Likewise the latter must reply promptly as to any considerations which might affect the prospective adviser’s decision whether or not to accept appointment. Where there is no existing adviser, the procedures apply equally to any previous adviser.

5.9.2 Members should undertake the same procedures with non-members as they would with members.

5.9.3 Members invited to undertake professional work additional and related to that being carried out by another professional adviser should consult paragraph 5.11.1 (below).

5.9.4 Communication is meant to ensure that all relevant facts are known to the member considering accepting appointment, who, having considered them, is able to reach a responsible decision whether or not to accept the appointment.

5.9.5 It should be emphasised that the decision whether or not an appointment can be accepted is that of the prospective appointee. There is no procedure of “professional clearance” whereby the existing adviser can decide to give or withhold any permission to act. It is open to the existing adviser to complain to the AAT if he or she believes that a successor has accepted appointment without giving due weight to the existing adviser’s reply.

5.9.6 Communication of the facts to a prospective adviser does not relieve the existing adviser of his or her duty to continue to press on the client his or her views on any technical or ethical matters which may have led him or her into dispute with the client.

5.9.7 The appropriate procedure for any member who is invited to act in succession to another adviser/member, whether the change-over is at the instance of the client or of the existing adviser is to:
(i) explain to the prospective client that the member has a professional duty to communicate with the existing adviser;
(ii) request the client to confirm the proposed change in appointment to the existing adviser, and
authorise the latter to co-operate with the member as the prospective successor;
(iii) write to the existing adviser in respect of the latter’s involvement with the client, requesting
disclosure of any issue or circumstance which might be relevant to the proposed successor’s decision to accept or decline appointment.

5.9.8 After these procedural steps have been taken, the proposed successor should consider, in the light of the information received from the existing adviser or from any other source, including any conclusions reached following discussion with the client, whether:-
(i) to accept the appointment;
(ii) accept it only having addressed any representations made by the existing adviser; or
(iii) to decline it.

5.9.9 The fact that the existing adviser’s fees have not been paid is not of itself a reason for a prospective appointee to refuse to act.

5.9.10 The proposed successor should treat in confidence any information provided by the existing adviser, save to the extent that he or she needs to disclose matters necessary to carry out the assignment.

5.9.11 The appropriate procedure for any member or firm which receives a communication from a proposed
successor is to:
(i) answer promptly any communications from the proposed successor about the client’s affairs; and either
(ii) advise the proposed successor whether there are any issues or circumstances of which the latter
ought to be aware, giving an adequate explanation of the issues or circumstances;
or
(iii) confirm to the proposed successor that there are no such issues or circumstances.

5.9.12 It is good practice for both the proposed successor and the existing adviser to record in writing any discussions which have taken place between them as to issues or circumstances.

5.9.13 If the proposed successor has received no answer to his or her enquiry as to issues or
circumstances, he or she should write to the existing appointee, by Recorded Delivery service,
stating his or her intention to accept the appointment unless a reply is received within a specific reasonable period. The proposed successor is entitled to assume that silence on the part of the
existing appointee indicates that the latter has no adverse comment to make. A member who accepts appointment in such circumstances is not precluded from complaining to the previous appointee’s professional body that the previous adviser failed to respond to his or her enquiry letter.

5.9.14 Defamation
Counsel has advised that under UK law (and that of certain other common-law based legal systems), an
existing adviser who communicates to a potential successor matters damaging to the client or to any
individuals concerned with the client’s business will have a strong measure of protection were any action for defamation to be brought against him or her, in that the communication is likely to be protected by what is called “qualified privilege”. This means that the existing appointee should not be liable to pay damages for defamatory statements even if they should turn out to be untrue, provided that they are made without what the law regards as “malice”. There is little likelihood of an adviser being held to have acted“maliciously” provided that:
(i) he or she states only what he or she sincerely believes to be true; and
(ii) he or she avoids making reckless allegations against a client or connected individuals which he or
she could have no reason for believing to be true.

5.9.15 Succession Following Vacancy due to Death etc.
A member who is invited to accept appointment on the death of a sole practitioner should endeavour to
obtain such information as may be needed from the deceased’s alternate (where appointed), the
administrators of the deceased’s estate, or other available sources.