I have been asked by an accountant to provide a one off piece of work, invoicing her directly and she will pass the cost onto her client. I have spoken with the IAB and they have said that I don't have to do any due diligence checks as the accountant would/should have done this but advised that I should send them a letter of engagement.
Would anyone be happy to share such a letter? I have standard ones I send out to new clients but I need ideas for the wording for the money laundering checks part - hope that makes sense?!!!
Hi Katie
Ive seen a few requests on here for sharing a letter of engagement and so far I dont think Ive seen anyone want to share such documents. You say you have one already - you could share that and advise which parts you are uncomfortable with and why you want to change them/what kind of thing you wish to be built in, although I suspect you still may not get many takers, mostly down to most people probably not having the specific knowledge of contract law required to review /create such documents. I know a few people who have cobbled together bits from one contract with bits from another, without realising that they are significantly weakening the contract they have in place because they are not considering the way the clauses fit together nor indeed the law relating to each specific area of the contract.
Did you get your original letter from the IAB? If so I would be tempted to go back to them and request suggestions for amendment - their legal department should be able to guide you (its what your fees should be covering). If its not an IAB one then I would be tempted to perhaps go back to the legal eagle who created for you - worth a few ££ to get its right.
In terms of the due diligence you need to undertake - you will need to check up on the Accountant, rather than their client, is my understanding.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
there was quite a good thread on here some time back where we explained why we don't share engagement letters but then went on to give structure to a good letter and even excerts from our letters... Just not the whole thing.
I know that people think that we are being mean but in this litigous society not sharing is protecting both ourselves and the people that we share with.
I think that most peoples letters are built from more than one source.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Morning trouble!
Oh I knew you would locate a good thread, despite this time me not dropping bigs hints to do so! Wish I could find stuff that easily - the perks of being a Mr Mod!
Actually I havent seen that one before - interesting read.
Must admit to playing a bit of devils advocate with my suggestion for Katie to share - food for thought. (sorry Katie - I was also bumping your thread so it didnt disappear off the page without a response, so hopefully Im forgiven)
On the building from different sources bit - Ive seen some right howlers in other forms of legal docs done in this way - some absolute corkers in business acquisition/sales agreements and one or two in engagement letters too. Im not saying its wrong to do it but you need to have some knowledge of what impact the relative clauses can have, especially when linked with the rest of the document.
In the two engagement letters Ive seen shared (from elsewhere, not on here) Ive not seen the likes of ''FORCE MAJEURE EVENTS'' heading as you suggested in your other thread, but thats a prime example of people not having the knowledge to build these things to cover every eventuality. Another great one, also mentioned in the other thread and one I built into mine is about directors paying in the event the company didnt (not had to use it yet with my policy of late payers now having to cough up in advance!).
I love playing with legals just as much as I love playing with numbers!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
funny you should mention force majeure as that was actually the search phrase that I used to locate that thread.
When I advocate lifting bits I would not for one moment suggest lifting sebntences or paragraphs as people often inadvertantly create documents that as you indicate any legal challenge could drive a juggernaught through.
Even lifting whole sections can be problematic if one doesn't read it properly to ensure that the section is completely self contained.
I know that some may argue that the safest route is to adopt the engagement letters written by our own professional bodies but so many of those seem to have been written by the office junior rather than legal council.
Maybe we've just been pampered working with some of the very top legal minds Jo so we can see that not all legal documents are created equal!
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I found that the letters of engagement issued by bookkeeping institutes are quite slim. Mine was from a paid forum. The guy is a member of this site. It is a very good letter. I don't want to break any rules by advertising, so I won't be blatant. (To Shaun - User being KM) There is value to be had in sometimes subscribing to various sites. I would love to see a download section on here.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
funny you should mention force majeure as that was actually the search phrase that I used to locate that thread.
When I advocate lifting bits I would not for one moment suggest lifting sebntences or paragraphs as people often inadvertantly create documents that as you indicate any legal challenge could drive a juggernaught through.
Even lifting whole sections can be problematic if one doesn't read it properly to ensure that the section is completely self contained.
I know that some may argue that the safest route is to adopt the engagement letters written by our own professional bodies but so many of those seem to have been written by the office junior rather than legal council.
Maybe we've just been pampered working with some of the very top legal minds Jo so we can see that not all legal documents are created equal!
Pampered by in house and external, although I've done some law exams (we had to at certain levels in those days). Been in a few midnight acquisition completion meetings arguing over clauses before now. The good parts of the old job.
-- Edited by Cheshire on Saturday 12th of March 2016 05:36:36 PM
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Do you still have the limited liability clause in your LOE? I seem to remember we had a conversation on here a few months ago and you said it carried no weight?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
even clauses that carry no weight in court may still make people believe that they do if they appear in the contract.
certain limitation of liability clauses are valid as exclusion clauses whilst other are less so. The ACCA frowns upon hiding behind such clauses as they believe that it encourages a less robust approach.
My personal view is that whilst we live in a society that will sue "just on the off chance" then I am quite happy to retain such clauses for the limited protection that they do offer even if such is only to deter frivelous claims.
Certainly if Bannerman, Johnstone and Maclay had had such exclsuion clauses in their engagement letter then RBS would not have been in a position to seek reparations or see one of the office staff of BJM jailed.
If you have a link to the other discussion I'll put my answer into better context.
All the best,
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
If you have a link to the other discussion I'll put my answer into better context.
What - you cant find it?!!! Makes me feel better knowing Im not the only one who cant always find old posts, despite what I said earlier about your Mr Mod super-powers.
I do recall that hat thread but no idea what/who wouldve started it off.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Shaun, I think I misunderstood you back in November because I thought you meant we shouldn't include the clause, but I very much agree with your comment upthread about including it.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
slightly different scenario in the other one John where someone is attempting to restrict financial exposure when they are at fault rather than this scenario where one is attempting to restrict expectation by defining boundaries to our work, responsibilities and who we are answerable to.
It is quite legal to restrict expectation such as a clause stating that the document / financial statements may only be used by the intended parties unless express permission is granted to share the document with a third party, where it is not (currently) legal to attempt to retrict the compensation of losses suffered by someone who acts upon the document if you have not attempted to restrict their access to it.
Hope that makles sense. Its getting late and I've been having serious email problems that I've been attempting to fix so my brains not firing on all cylinders at the moment
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Cool response from Shaun :) The only way you'll be certain of a solid letter is by getting a solicitor to draw you one up. I say certain, yet all it takes is a smarter solicitor to find holes in it.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
Think you are having probs Shaun, I left my PC for 10 minutes and it's uploading windows 10 automatically. Due to auto updates and windows changing their policy. Now I can go ahead or completely ignore and no clue if I will get another chance to upgrade for free if I so choose. Wanted to backup everything else on my PC, give it a trial and at least restore everything if I didn't like it. No idea what to do, am too much of a technophobe and don't need this right now with all my work piles. Aaagggghhhh. Hope you get your emails fixed and soon!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
My PC problem is that every time that I get a new email I get every email for every talk talk email account (I have five) for the past couple of months. Yesterday I received almost 37,000 emails!
to get around the issue I've now logged into each talktalk account and deleted all old messages held on the server however, you can only do that one short page of messages at a time (that was fun).
To get rid of the messages I tried just grabbing the lot and doing a mass delete but then that corrupted the index meaning that when I attempted it again the messages could only be deleted individually leavinng me with 37k messages in various inboxes.
Late last night I got around that by in turn deleting and reinstating each email account.
I really hate TalkTalk and Virgin are off my Christmas card list for selling me to them.
After saying that I am looking at moving house at the moment and one of the crtiteria for the house that we move to is trying to get in a Virgin cable area so that we can get them back again as the only problem that I had in over twenty years with Virgin was (1) losing my connection for a week when I was moved from dial up to ADSL (acceptable issue) and (2) selling me to TalkTalk (unnacceptable issue).
My other email addresses are fine (I have seven non TalkTalk addresses) all linked into the same Windows Live Mail (so they appear as a single big bucket) and I did not delete the messages in those non talktalk accounts so people contacting me through (say) the site will reach me but the messages have all been burried in the avalanche from TalkTalk yesterday and I will be trying to sort out the backlog on those accounts today.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
The only way you'll be certain of a solid letter is by getting a solicitor to draw you one up. I say certain, yet all it takes is a smarter solicitor to find holes in it.
Hi Johnny,
Quite, as with conveyancing solicitors you get both good and bad in the market so as with choosing an accountant a lot of it depends upon recomendation.
As for smarter solicitors. No matter how sure one is of their case I would not ever recomend attempting to take on bank in house solicitors who are all top of their tree and on payroll.
As you indicate Johnny, not all legal representation is created equal.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Agreed. Ultimately I see my letter as a form of damage limitation at best. Assuming one has adequate insurance, assuming all terms and conditions are met, no straying over the line towards aggressive planning, all should be reasonably safe. I'm hoping I only ever need mine to get away from a poor client, as an oppose to trying to escape the Eagle eye of a solicitor. Some here may well know the tax acts as good as a tax lawyer, yet they have the power to get you in front of a more powerful judge if the worst happens. Shaun do you have the opinion that if accountancy was a regulated profession this could work against us? Would the onus of responsibility swing more towards us, than towards the client? I'm not sure on the level of ultimate responsibility in the US and Ireland where the trade is regulated.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
37,000 emails eek!!! On my round touit list is to go through my 3 gmail accounts and delete all the old emails that I no longer need. Theres about 12,000 of them and I thought that was bad enough, although the vast majority are marketing emails. One of my email addresses I tend to use for that purpose.
Moving onto business emails I have pretty much most of them on the server going back to 2010 shared between 3 different names. At some point I would like to go through them all and somehow save the ones I want to keep but delete the actual email, is there a way to do this? I thought maybe a PDF but if theres a better way Id prefer that. I'm only keeping the previous two domain names now because I don't want to lose the emails.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
I'm a firm believer that accountancy should be a regulated profession (elements of it such as Insolvency and Audit already are).
I do not see that regulation of the profession could work against us. The responsibilities of directors is set in statute and simply ensuring that their representatives were qualified accountants does not alter that responsibility.
The question has to be though how would restricting accountancy to trained accountants work against the profession? Surely it could only build more confidence in it?
The US works to a very different GAAP which is rules based rather than the UK / International principles based system so its perhaps not a good comparrison. However, I understand what you were getting at and I think a more apt comparrison would be the regulated vs unrequlated areas within the UK. i.e. Audit firms (regulated) vs non Audit (non regulated).
The directors remain ultimately responsible for the accounts, the underlying bookkeeping and the standards upon which such are based. The auditor has a responsibility to report on whether they feel that the directors have performed that task properly (even though such responsibility will have been divested to accountants).
The Auditors responsibility is to the shareholders, not the directors (even though the directors hire them). Similarly if all accountancy were regulated why would our current responsibilities to ensure that the work performed by us on the directors behalf was performed to the highest standards change? Our responsibility is to the truth not to the business owners but in ensuring that the financial statements give a true and fair view we are in fact protecting the business owners.
No, my feeling is that greater regulation of the profession in order to instill more confidence in it would not be a bad thing (indeed, I was one of the signatories the last time that this was presented to Number 10 during the Brown administration).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
It has to said that most of the public already believe accountancy is a protected profession. Regulation costs money - someone has to pay. Well an auditor has a responsibility in his own right / name. He signs to verify information, he is accountable. An accountant is not - not to the same extent. If it were regulated I would feel that some of the responsibility would be taken off the shoulders of the director and placed on the accountants. I'm not against regulation at all, but it is misguided to believe there wouldn't be negative changes for those in the profession - I'm not making reference to unqualified there - that's another story.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
My PC problem is that every time that I get a new email I get every email for every talk talk email account (I have five) for the past couple of months. Yesterday I received almost 37,000 emails!
to get around the issue I've now logged into each talktalk account and deleted all old messages held on the server however, you can only do that one short page of messages at a time (that was fun).
Afternoon Shaun
What a nightmare! Thought my moving 4500 emails from my old Virgin account before it shut was bad enough. Yep you can only delete 50 or so at a time. Get your boy on it and pay him? Im sure he will be glad of the extra dosh. Thats what I did! Until of course he started moaning like hell cos he was bored.
Dont you just love technology - when it works its great, but when it doesnt..........
Im having probs, but just now Im back on my old PC which is just weird! Very tempted to just jump in the car and head off into the sunset, especially as its such a gorgeous day.
Hope you find a way to get it sorted more easily.
Have a great day peeps
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
The auditor only gives an opinion as to whether they agree or disagree that in all material respects the financial statements give a true and fair view of the entities affairs for the period.
The responsibility for the accounts remains always with the directors.
Taking out of the equation unqualifieds (sorry, I misunderstood your previous question) compilation is already regulated by the companies act that divests responsibility from itself to financial reporting standards and qualified accountants who show incompetence would be fined and ultimately expelled by their professional bodies.
But, despite qualified accounting being highly regulated already, that does not divest the director of their responsibility and whilst such is emphasised in engagement letters such is only making the directors legal responsibilities clear to them rather than imposing conditions peculiar to the engagement where practitioners are seeking to avoid responsibilities.
Basically, if we are talking only about qualified accountants then the regulation that concerns you is already very much here. Where we are talking abot unqualifieds and under qualifieds then that is more of an issue and the one that I was mistakenly responding to in my previous post (sorry about that, my mistake).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
