If person has been a client of accounting firm A for a long time, and the firm sells "the clients" to accounting firm B, should B be sending the client a new engagement letter before they do any work? B is a completely separate firm - different name, different owner, different tax agent number - but some staff have been employed by B. B is saying they've "already done half the work", even though they haven't been provided any information from the client yet. I think they might be talking about the prefill information from the ATO, which seems a bit of a stretch, but isn't that only for individuals? There's also a couple of trusts and a super fund.
I think you do not have to go with B at all. "A" can sell business and client list but you get to choose who your accountant is. Maybe take this as an opportunity to choose a new accountant?This happened to us once many years ago. SMSF, company, personal tax returns etc and it was a dreadful experience. We were actually able to go back to the original accountant after 12 months when we approached them. Long story but being sold was a real nightmare at the time.
Would that have had to be in the existing engagement letter between the client and the old firm A? Or can A & B just contract to do that?
Is a client obligated to the new accountant in this kind of situation? Nothing in the engagement letter they have has any reference to a change of ownership.
Nope, you have no contract with them. Usually the purchase of a business takes into consideration ‘attrition’ (clients leaving), or alternatively there will be an amount set aside and held in trust which will be disbursed to the seller after x months depending on how many clients do not stay with the new firm. You may not be able to return to Firm A for 12months though due to ‘no competition’ clausess. Blacky
Should I have a poll on this? Doesn't the client always have the choice of who is their accountant? I don't see anything in the engagement letter that binds the client to the accountant? I've had a look around at other engagement letters and they are all pretty similar - they specify what the accountant will do, and that the client pays them for the work, but nothing about if the accountant sells out, and nothing requiring the client to come back?
You have a choice. After our experience I would suggest you do your due diligence on the new accountant and then make a decision.
Of course the client has a choice. They could leave their current accountant at any stage usually. But it is a question of perhaps payable perhaps. Simple contract law.
Did your old accountant disclose your personal tax file number to a third party without getting your permission? Normally a signed umbrella agreement gives this permission as part of the terms. There are other ways around this problem but every proposal for additional services should be done with a new documented terms of service in any event.
My apology as this question is off topic. Would anyone suggest me a good accountant/tax advisor in Brisbane? I am having an issue with my PPOR and IP tax. It is a mess right now. Thanks.
