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Help with accountants fee dispute

hometruths

Hi, have a problem that we're in a catch 22 with our accountants over accuracy of work done and fees. I know with solicitors there is a mechanism whereby you can raise the fee dispute with the professional body and they will adjudicate impartially. Is there such a practice within the accountancy profession?

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Citrus_8

https://www.boards.ie/discussion/2058284338/help-with-accountants-fee-dispute

There's many professional accounting bodies, but the question is which of the your accountant is a member with? Have you done your homework and did a research about the accountant? There are some accountants who claim who they are without being the one. What is their qualification to call themselves an accountant? Are they qualified with AAT, ATT, ACA, ACCA, CIMA etc etc? Check their email signature if there are any letters or logo beside their name.

hometruths

https://www.boards.ie/discussion/comment/120245814#Comment_120245814

They are FCA. I have emailed Chartered Accountants Ireland and asked them if there is anything they can do. Still awaiting a response.

Madd002

May I ask what the dispute is etc.

I had similar issue a few months back for 1st set of year end accounts and I wasn't happy with bill or work completed as the set of accounts didnt look right compared to my figures I did on home pc.

When we went with them they said fee around 800 per year. A few months in we went vat registered and I did all the work manually on excel bank rec etc. and had every receipt as per bank statement and submitted everything in order so it would roughly take 30mins max to enter 20-30 receipts on their system.

1st 6 months bill was 600. 2nd €500

1st set of year end accounts 1200.

So for 1st year €2100

Back to accounts not being right, i had spreadsheet of all invoices and dates paid into bank all bank reconciliations done and income received for said year.

After receiving set of accounts that needed to be signed off and sent back I noticed a discrepancy of nearly 4k.

I kindly asked them to double check as I didn't want to accuse.

I had to send off all my spreadsheets so they could check against theirs and I got a phone call to apologise and say I'm right.

No reduced fee for all the hours I worked to find discrepancy.

I have now taken over doing vat returns myself to safe money.

hometruths

https://www.boards.ie/discussion/comment/120246268#Comment_120246268

Similiar, albeit the bills are somewhat larger. There a few different problems, but essentially it boils down to accuracy. There was a very large mistake made in the calculations, and I'm reluctant to pay for the inaccurate work done, nor the extra work incurred in checking it.

Jim2007

https://www.boards.ie/discussion/comment/120247186#Comment_120247186

And what was the feedback when you pointed out the errors to them?

Madd002

I told them if there were anymore mistakes I'd take my business elsewhere as this is what their qualified to do, we went on a recommendation and they are chartered accountants.

hometruths

https://www.boards.ie/discussion/comment/120248081#Comment_120248081

When I raised the query saying at first glance the figures looked wrong by quite a significant margin, the response was he'd look into it and get back to me.

He duly did so, and there was no acknowledgement of any error, just a reply along the lines of:

"Here are the accounts in a different format in order to better present the figures"

The better presented figures in a different format confirmed and corrected the original error.

Jim2007

https://www.boards.ie/discussion/comment/120248224#Comment_120248224

https://www.boards.ie/discussion/comment/120248320#Comment_120248320

Errors are a fact of live, everyone makes them including professional accountants. Some errors are 100% the fault of the accountant and some are not, there can be misunderstandings, misinterpretations etc... So I would not get very excited about finding errors in the accounts, especially if the task was accounts preparation and filing as opposed to an audit situation. And in deed I have found error in the past.

It's what happens next that I'd be concerned about:

If the error was purely the the accountants, I would not expect a discount because the work was done, but I would expect that the additional work needed to recheck it and correct it would not be charged
If the error was a result of a misunderstanding and did not require much effort to correct it I'd expect not to have to pay extra and if it was something fundamental that was going to incur significant expense to correct, then I'd expect a discussion on it before proceeding.
In situations where I was given an estimate, I'd expect that if it was going to cost significantly more that estimated that I'd be informed and there would be a discussion before proceeding.
And I'd expect an engagement letter setting out the work that will be done and the methods used to calculate the cost of the effort plus an estimate of the final figure.

Full disclosure: I'm a retired FCA, but I have not worked in public practice in over three decades. Most of my career was spend as a consultant in Swiss private banking and I regularly had my accounts done by an Irish accounting firm.

Madd002

https://www.boards.ie/discussion/comment/120249195#Comment_120249195

Thanks for advice as yes they never gave a breakdown of charges, I fell into accounts and still there after 15yrs but not qualified, I work under a Financial Controller but I'm meticulous in the work I do, If I'm paying for something i want it done right i just didnt have the confidence to do myself trusting they would be correct now I'm not so sure, I might get some training on ROS and advice from my FC as its only husband's accounts max income 50-60k a year 20% tax deducted at source so cant be that hard, I hope..!!

hometruths

https://www.boards.ie/discussion/comment/120249236#Comment_120249236

Hence the OP. In the circumstances, if it is possible to do so, I think it is fair to ask the professional body to take a view on this.

[Deleted User]

Agree with Jim2007

Did you have an engagement letter in place agreeing fees for work? that would be standard.

If so, it would usually include a caveat that if work was likely to include additional work, they would notify you in advance of any potential overrun of fees.

Jim2007

https://www.boards.ie/discussion/comment/120249253#Comment_120249253

Unless you have specifics it is like arguing over the length of a piece of string and top of this it's time consuming, frustrating and not a lot will come out of it in the end. It will come down to he said/she said and how long does it take to look into an error one hour, two hours etc....

If it were me I'd put the time into finalising the accounts and the get shot of the accountant. I know there is the righteous indignation part of it, but most small business owners are doing this stuff after a days work and at some point you have to draw the line and have a life.

hometruths

https://www.boards.ie/discussion/comment/120249841#Comment_120249841

I obviously have the specifics, and I realise without going into more detail, it is impossible to judge whether I have reasonable concerns or not.

I didn't think it was appropriate to go into precise detail in a public forum, hence the question in the OP was "Can I get help with this from a professional body" rather than "Can I get help with this from boards.ie?"

Madd002

https://www.boards.ie/discussion/comment/120249841#Comment_120249841

I think they'll be ok going forward after what happened, they said they'll use my spreadsheets as everything in order I spend an hour each week on my day off updating spreadsheets and bank rec and they'll tick and batch against what they've input their side so at least if there's any discrepancies they'll be found before they submit actual returns.

Jim2007

https://www.boards.ie/discussion/comment/120249878#Comment_120249878

I don't know the answer, all I can say is that I can remember seeing any reported cases of member of the ICA being held to account for such circumstances as you have described. Of course the thread of making a complaint or actually making a complaint might have been enough to settle the matter.

DFB-D

https://www.boards.ie/discussion/comment/120249878#Comment_120249878

OP CAI are not very likely to investigate unless they detect deficiencies in ethics or chartered rules. If you had damages (not including your own labour), they may assist in a resolution, but that is not the case here.

I am assuming you are a sole trader?

Mistakes do happen and accountants aim for materially accurate rather than 100% free from error. They will try their best to review and test figures, but yes, mistakes can slip through.

There are various levels of accounting services, a P&L only (sole trader only) set of accounts has the greatest risk as the accountant is not verifying against bank statements / creditor statements. If the accounts include a balance sheet, the accountant performs bank recs, creditor recs which will often uncover missed items in the P&L.

There is the option to ask for audited accounts which are of a higher standard again (some companies ask for this even when an audit is not required by law), but still not guaranteed error free (only free from material error, and there is still risk of undetected error), but you can request similar as a sole trader. But accountants generally ask you to review figures as well just in case they missed something, so if you are prepared to work with the accountant you get a fairly accurate set of accounts.

I don't think you should be asking for a discount, it is not only the accounts you paid for presumably (tax return? advisory?) and they fixed the error with no further charge to you I assume.

If you feel badly treated, take your business elsewhere for the next set of accounts, but it might be a bit rash based on one mistake. It sounds like an expense was omitted, which could be 2 invoices stuck together, etc. If you prepare excel workings always provide this along with the documents, makes it easier for the accountant to verify or explain variances.

Hope this helps!