Ethics of switching accountants

Professionally designated accountants are required to follow a strict code of ethics.

If any of you have switched accountants, you probably are not aware of what happens behind the scenes after making such a move.

Professionally designated accountants are required to follow a strict code of ethics.

The Certified General Accountants code of ethics can be broken out into several sections.  These sections are: a) Responsibilities to Society; b) Trust and Duties; c) Due Care and Professional Judgement; d) Deceptive Information; e) Professional Practice; f) Responsibilities to the Profession; g) Independence.

So depending on the type of engagement and under Section e) Professional Practice, your new accountant is required to contact your previous accountant in writing letting them know that they have been asked to take over your account.

That letter also needs to ask if there is any professional reason why the new accountant should not take over the account.

When your previous accountant receives this letter, they are required to respond promptly to it.

They are required to co-operate with the new accountant and provide any information which they have prepared, that the new accountant has requested, in a timely manner provided that all outstanding billings have been paid.

If they are in possession of any books or documents belonging to the client, they are required to return these upon request, whether or not the outstanding billings have been paid.

The client may wish that these documents go directly to the new accountant. Both the new and the old accountant need to recognize that the client’s interests are paramount.

Even if you have not switched accountants and providing that all your bills have been paid, you have a right to inspect any financial record that pertains to you that is in your accountant’s hands at any time.

Some other items under Section e) Professional Practice that are of note include CGAs not being allowed to engage in bidding practices for professional services that use unfair methods of competition.

If we are referred a client because we need to perform a special service for that client, we can’t provide any other service for that client without the consent of the previous accountant.

Any pro bono work needs to ensure that there are no independence issues, that qualified accountants will be performing the work and devoting appropriate time to it and that due care will be taken to comply with all professional standards and quality control procedures.

We cannot accept a commission unless it is a fee resulting from the referral or transfer of a client between professional colleagues, such as a purchase or sale of a practice.

We cannot receive commissions from investment dealers or insurance brokers for the trading of securities or the placement of insurance for clients. We cannot receive a fee for an audit, review engagement, compilation or tax return that is contingent on the outcome of those engagements.

We cannot sell any other services through our firms other than professional services. We are required to register with our association as a public practitioner, pay the annual fees, undergo the practice review requirements of the association and hold professional liability insurance for infinity.

If we would like to hire an employee currently employed by another firm, we need to first contact that firm and let them know of our intention.

For those CGAs that are not in public practice, this section also requires that there be a realization that due to their professional designation, there will be reliance on their work and that the reputation of their place of employment may be enhanced due to their employment.

All CGAs are required to encourage an ethics based culture in their organizations that emphasizes the importance of ethical behaviour.

If a CGA believes that there is unethical behaviour occurring within the organization, the options are to obtain legal advice and try to remedy the situation, but if there are no remedies, then the only option is to resign.

The CGA Code of Ethics can be viewed by the public at, Members tab, Ethics and Standards, link to Code of Ethical Principles and Professional Conduct.

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