How to obtain accountant's Professional Indemnity Insurance details

Sefe

I understand that normally the contract for insurance between an insurance company and their client is confidential between them. However, where professional indemnity insurance is compulsory certain insurance company’s details must be supplied.

For example the solicitors' profession as represented by the Law Society of Ireland implements this in a completely professional and transparent manner. On their search form the buttons leading to each of the search results are labelled "Contact & Firm Insurance Details", and in the details page you find the paragraph "Minimum Compulsory Professional Indemnity Insurance Details" (Start Date, End Date, Cover Amount, Insurer).

On the other hand the accountancy profession as represented by the ACCA falls short in every respect. The PII Details of their members are nowhere to be found, and when I enquired about this, after the accountant would not supply his PII details "because then our policy charges might rise", the relevant ACCA employee from their Dublin office told me "I don't know if it is compulsory for our members to supply their PII details, probably they don't have to, in order to guard themselves against claims of their clients".
The only advice given to us was "to lawyer up" in order to bring the accountant to supply us with his PII details. Now obviously this would be in nobody's interest, as it would only serve to further push up the loss amount for the insurance and eventually for the accountant himself, especially in a compelling and well documented case like the one at hand.

So, to keep things as simple and expedient as possible, I would like to know what law or bylaw or implementation rule I can cite in order to bring the accountant or the ACCA to supply us with the Compulsory Professional Indemnity Insurance Details?

smcgiff

Sefe wrote: »

So, to keep things as simple and expedient as possible, I would like to know what law or bylaw or implementation rule I can cite in order to bring the accountant or the ACCA to supply us with the Compulsory Professional Indemnity Insurance Details?

I don't know for sure, but I don't think it's like car insurance.

If you believe you have a claim against your accountant you need to go through the legal process and if there is compensation due to you the accountant will claim from his insurance company and a payment will be made to you.

Sefe

Actually there are two aspects involved re my original post:

- How come that other professions like e.g. solicitors do comply with their obligation to supply "Minimum Compulsory Professional Indemnity Insurance Details" while the ACCA and their members do not? Are there different laws in place for the ACCA?

- I would like to file a third party claim against the PII of the accountant, as eventually suggested by the Senior Investigating Officer of the ACCA, after the accountant repeatedly had admitted his professional negligence while answering to that very Senior Investigating Officer.

Why should I bring in a lawyer only to obtain the accountant's PII details, which are supposed to be made available in the first place?

Alan Shore

I think you need to take a step back here.

Solicitors are regulated by law there is a list of those qualified and approved by the law society to act as solicitors.

Anyone who wishes to act as an accountant can do so. There is no requirement for that person to be Registered or hold professional indemnity insurance.

Is your claim against an accountant or an auditor two very different things.

Presumable if you have informed your accountant that you are taking a case against them for negligence your will need some form of representation to prove your case be that a solicitor or another firm of accountants.

smcgiff

Sefe wrote: »

Why should I bring in a lawyer only to obtain the accountant's PII details, which are supposed to be made available in the first place?

What are you going to do, make a claim directly to the insurance company ? Of course you're going to have to establish a claim, which will likely involve legal intervention.

If they are a regulated ACCA practice they will have indemnity insurance.

viztopia

There is a process involved in making a claim against an accountant which is a legal one and first step would be to engage a solicitor. If the accountant has a practising certain they are obliged by their governing body to have pii.

Sefe

Alan Shore wrote: »

I think you need to take a step back here.

Solicitors are regulated by law there is a list of those qualified and approved by the law society to act as solicitors.

Anyone who wishes to act as an accountant can do so. There is no requirement for that person to be Registered or hold professional indemnity insurance.

So this means, although ACCA members are required to have a Professional Indemnity Insurance in order to practise accountancy, they do not have to supply their PII details like e.g. lawyers do?

Alan Shore wrote: »

Is your claim against an accountant or an auditor two very different things.

What are the differences?

smcgiff wrote: »

What are you going to do, make a claim directly to the insurance company ? Of course you're going to have to establish a claim, which will likely involve legal intervention.

Yes, I want to file a third party claim directly to the insurance company. To establish this claim I'll refer to the results of the investigation concluded by the ACCA.

smcgiff wrote: »

If they are a regulated ACCA practice they will have indemnity insurance.

Indeed the accountant (and the ACCA) confirmed that he has an indemnity insurance, he just expressly refuses to supply me with the details, trying to prevent me from filing my claim, which makes me wonder what laws or bylaws he might be breaking thereby.

smcgiff

Sefe wrote: »

Indeed the accountant (and the ACCA) confirmed that he has an indemnity insurance, he just expressly refuses to supply me with the details, trying to prevent me from filing my claim, which makes me wonder what laws or bylaws he might be breaking thereby.

Who's to say what you are entitled to? I doubt ACCA have made an award.

Once a court determines this the accountant will claim off his insurance company.

Alan Shore

Alan Shore
Is your claim against an accountant or an auditor two very different things.

What are the differences?

One is a regulated activity - Audit. The other is not - accountancy.

Sefe

smcgiff wrote: »

Who's to say what you are entitled to? I doubt ACCA have made an award.

You are right, I may not be entitled to anything yet, but looking at the overwhelming evidence in the case at hand the insurance company might choose to rather settle it with myself instead of going to court in order to avoid further pushing up the loss amount.

Alan Shore wrote: »

One is a regulated activity - Audit. The other is not - accountancy.

@Alan: Thanks for the information! Actually the accountant refusing to supply his PII details is listed at the CRO as a Statutory Auditor.


My original question is not so much about the case at hand, rather generally speaking whether accountants (or auditors) are required by law to supply "Minimum Compulsory Professional Indemnity Insurance Details" or not.

Alan Shore

Sefe wrote: »

@Alan: Thanks for the information! Actually the accountant refusing to supply his PII details is listed at the CRO as a Statutory Auditor.


My original question is not so much about the case at hand, rather generally speaking whether accountants (or auditors) are required by law to supply "Minimum Compulsory Professional Indemnity Insurance Details" or not.

But the difference between accountants and auditors is fundamental!

Anyone can be an accountant and don't need insurance by law therefore the law can't provide for what you are looking for.

Accountants are not like solicitors.

So you have made a complaint having suffer some lose, the ACCA have said that your complaint has merit but can only make a decision in relation to disciplining the member.

smcgiff

Sefe wrote: »

You are right, I may not be entitled to anything yet, but looking at the overwhelming evidence in the case at hand the insurance company might choose to rather settle it with myself instead of going to court in order to avoid further pushing up the loss amount.

I don't know if it has to be given to you (best to check with ACCA), but if I were in practice I'd hope it wasn't obligatory or I'd fear it would be open to abuse.

mickdw

I would contact your solicitor and have them write to accountant and start whatever process they go through to make a claim. At that point, the accountant is bound to notify his insurer of the claim against him. from that point forward it might be alot easier to know who his insurer is.

Sefe

smcgiff wrote: »

I don't know if it has to be given to you (best to check with ACCA), but if I were in practice I'd hope it wasn't obligatory or I'd fear it would be open to abuse.

This cuts both ways indeed. The insurance company is not very likely to give in to any claim without due consideration. On the other hand the accountant/auditor may try to obstruct or at least delay the course of justice "because then our policy charges might rise".

Alan Shore wrote: »

Anyone can be an accountant and don't need insurance by law therefore the law can't provide for what you are looking for. Accountants are not like solicitors.

So please let me rephrase my original question:
Are auditors required by law to supply "Minimum Compulsory Professional Indemnity Insurance Details"?

All the input is highly appreciated! I do not want to appear slow-witted, or waste anybody's time. I just do not want to overlook the obvious here, and I think the answer to this question might be of general interest.

Alan Shore wrote: »

So you have made a complaint having suffer some lose, the ACCA have said that your complaint has merit but can only make a decision in relation to disciplining the member.

That's exactly what has happened so far.

Alan Shore

So please let me rephrase my original question:
Are auditors required by law to supply "Minimum Compulsory Professional Indemnity Insurance Details"?

Auditors are not required by law to have PI it's an institute regulation. So I'd imagine no is the answer.

Just out of interest are you at liberty to disclose the nature if your complaint. Are the directors included in your complaint?

Sefe

Alan Shore wrote: »

Auditors are not required by law to have PI it's an institute regulation.

Thanks for clearing that up! It's difficult to understand though why solicitors are treated that differently compared to auditors. I think in most other countries all of them have to supply details of their compulsory PII.
Those professions do have much in common from a client's perspective after all, like the special relationship which is built on trust. Just read all their endless statements about "mission", "ethics" and "core values".

Alan Shore wrote: »

Just out of interest are you at liberty to disclose the nature if your complaint. Are the directors included in your complaint?

No, the complaint was filed against one of the three accountants/auditors in that partnership, who was the only one there working for us.

smcgiff

Sefe wrote: »

This cuts both ways indeed. The insurance company is not very likely to give in to any claim without due consideration. On the other hand the accountant/auditor may try to obstruct or at least delay the course of justice "because then our policy charges might rise".



So please let me rephrase my original question:
Are auditors required by law to supply "Minimum Compulsory Professional Indemnity Insurance Details"?

All the input is highly appreciated! I do not want to appear slow-witted, or waste anybody's time. I just do not want to overlook the obvious here, and I think the answer to this question might be of general interest.



That's exactly what has happened so far.

I'm biased against the compensation culture and I think the way the car insurance industry operates is a disgrace for example. However, I do believe also that if you were at a loss from the actions of your accountant then you should be compensated.

Going by what you have said (admission from the accountant and ACCA's acknowledgement) then hiring a solicitor may be the way to go. I can't give legal advice, but awarding of legal fees incurred by the successful litigant is often the case. But obviously not guaranteed.

If it sounds like I'm being careful with my wording... it's because I am.

Pro Hoc Vice

Sefe wrote: »

Thanks for clearing that up! It's difficult to understand though why solicitors are treated that differently compared to auditors. I think in most other countries all of them have to supply details of their compulsory PII.
Those professions do have much in common from a client's perspective after all, like the special relationship which is built on trust. Just read all their endless statements about "mission", "ethics" and "core values".



No, the complaint was filed against one of the three accountants/auditors in that partnership, who was the only one there working for us.

As has been pointed out solicitors are regulated by statute the solicitors act 1954 as amended. the solicitors acts are ver detailed and also include very detailed regulations. To best of my knowledge accountants are not regulated by statute. Also knowing the name of the insurance would be of little or no use, if a person wants compensation they must sue the partnership who will then notify the insurance company if they wish.

v638sg7k1a92bx

Pro Hoc Vice wrote: »

As has been pointed out solicitors are regulated by statute the solicitors act 1954 as amended. the solicitors acts are ver detailed and also include very detailed regulations. To best of my knowledge accountants are not regulated by statute. Also knowing the name of the insurance would be of little or no use, if a person wants compensation they must sue the partnership who will then notify the insurance company if they wish.

Exactly.

Also bear in mind that it is difficult to sue your accountant as the company directors are ultimately responsible to maintaining books and records.

Sefe

Angie Round Cemetery wrote: »

Also bear in mind that it is difficult to sue your accountant as the company directors are ultimately responsible to maintaining books and records.

This fact takes nothing away from the responsibility of the accountant to really and expertly deliver the work which he repeatedly assures has been done and for which he writes invoices and takes money.

When you're supposed to check and double-check each action of your accountants, this renders the whole profession utterly useless. As mentioned earlier, just read all the lengthy statements about "mission", "ethics" and "core values" of the ACCA and of all their members.

Just one example:

"We believe in always putting the needs of our clients first and adhere to several key principles when working for and with our clients:
(. . .)
- Trust: Our relationships with our clients are based on trust and we do not treat this lightly.
(. . .)"


Or another excerpt, from the ACCA page itself:

"Accountability: we accept individual and corporate responsibility for our actions, (. . .)

Integrity: we act ethically and work in the public interest, treating people fairly and honestly; we encourage the same from others."


Go figure.


I really see the urgent need for the accountancy profession to be subject to the same strict regulation by the state as is applied to lawyers. Effective self-regulation of members by their own lobby always is an illusion.

Alan Shore

But you are talking about the company's auditors.

This area is regulated the auditor has specific obligations in relation the preparation of the audit file.

A review of this file can be undertaken to check if the auditor has carried out the work correctly.

In the absense of any specific example from you about what your auditor has done wrong it's difficult to say much else.

For example if you are a shareholder who is not a director and it has come to light that there was a bank deposit account recorded in the accounts but that it transpired that the directors had diverted this money to their own bank accounts and the auditor did not check the bank balances then they were remiss.

dbran

Hi Sefe

If you think you have a case then you need to get yourself a lawyer and take an action in a court of law.

Otherwise this is just venting on an online forum.

There is usually always two sides to the story.

Best of luck with it.

Dbran

Jim2007

Sefe wrote: »

I really see the urgent need for the accountancy profession to be subject to the same strict regulation by the state as is applied to lawyers. Effective self-regulation of members by their own lobby always is an illusion.

I'm afraid you are the one under an illusion! You completely fail to understand the nature of an audit and the auditors responsibilities to anyone other than the shareholders - basically none!

If the scope of an audit was indeed to check out every single action of even a small company during a year, then the costs involved would be such that it would most likely wipe out the profits of the company for the year, which would not please the shareholders.

In simple terms the shareholders appoint people who they trust and believe in to manager the company, the directors. And they appoint the auditors to do no more than provide reasonable commentary on the financial reports presented to them by their appointed directors. It is important to realise that the auditor is not there to detect fraud or wrong doing by the company, if in the course of his work to form an opinion on the company, he identifies fraud or wrong doing he is required to deal with it, but that is all.

v638sg7k1a92bx

Jim2007 wrote: »

I'm afraid you are the one under an illusion! You completely fail to understand the nature of an audit and the auditors responsibilities to anyone other than the shareholders - basically none!

If the scope of an audit was indeed to check out every single action of even a small company during a year, then the costs involved would be such that it would most likely wipe out the profits of the company for the year, which would not please the shareholders.

In simple terms the shareholders appoint people who they trust and believe in to manager the company, the directors. And they appoint the auditors to do no more than provide reasonable commentary on the financial reports presented to them by their appointed directors. It is important to realise that the auditor is not there to detect fraud or wrong doing by the company, if in the course of his work to form an opinion on the company, he identifies fraud or wrong doing he is required to deal with it, but that is all.

It's hard to know as the OP hasn't outlined exactly what their grievance is. If it's a case the accountant was charging them for filing income tax returns and not following through on the work then on face value there would appear to be a genuine grievance. If's it a case that staff member nicked €50 from petty cash which was discovered during the audit then it's wishful thinking.