Discussion:Accountant workpapers to former client
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Discussion Forum Index --> Accounting Questions --> Accountant workpapers to former client
| 7 February 2008 | |
| What am I required to send to a former client? They have requested a G/L, depreciation schedule and the work-in-progress schedule for the construction jobs. I'm fine with the g/l and depreciation schedule, but I put a lot of work into the work-in-progress schedule and feel that the workpaper is mine. They don't owe me any fees. Will I have a problem by not returning that particular workpaper? Thanks. | |
| February 7, 2008 | |
| If you have not already billed for this work, it seems it would be reasonable to ask to be compensated for your work before you agree to turn over the work product. As long as you turned over all client documents used to prepare the WIP schedule, I don't think you are obligated to turn over your work product. | |
| 7 February 2008 | |
| All the information for that WIP schedule was faxed to me so they should have the originals. I think I'm safe with not sending my workpaper to them. I wanted other accountant's opinions. I know the AICPA says to call your liability insurance carrier, but before I do, I wanted other opinions. | |
Bushmaster (talk|edits) said: | 7 February 2008 |
| If they paid you to create it, and it appears they have since you state they owe you no fees, then it belongs to the client. | |
| February 7, 2008 | |
| It sounds like there's some friction with this client. Why would you not want to give them the workpaper? They sent you the information and you put it into a schedule. Isn't that what is done for the depreciation schedule? What's the difference here? | |
| February 7, 2008 | |
| By the way, there was an extensive discussion about returning client files some time last year. You might want to search under QuickBooks files or returning client files. | |
| 8 February 2008 | |
| Natalie - Yes, this was not a good split with the client because they asked me to do something unethical for tax purposes but wanted everything to look rosey on the financial statements for the general contractor's board so they could still be able to bid at the level they wanted. As a result, I told them I did not want to continue with them. That's a very summarized version of the struggle I've had with them. They are now saying my WIP workpaper is incorrect, but I formed the WIP with figures provided by the client at that time. If they believe it's incorrect, they should give their original numbers to their new accountant and let them figure it and see if the totals match or are within the same range.
Their bookkeeping is a nightmare. I tried to help them by getting them to purchase accounting software to be able to track job costs, etc. I know I may be a little emotional in the matter, but I don't want to hand over something I'm not required to AND I don't want to do anything unethical or cause someone to sue me. Thus, my dilemna. | |
RoyDaleOne (talk|edits) said: | 8 February 2008 |
| Any workpapers your create that would considered parh of the client's book and records, should be, turned over to the client. Workpapers that are not considered part of the client's books and records do not have to be turn over to the client.
Well, you can not prevent the suit. Naturally any client records you have that are originals, such as closing statement, contracts, etc. should be returned to the client. You make keep any copies you have of client records and would not normally be required to provide copies or copy of copies. You are not normally the client's record keeper. Your workpapers are a discoverable item in a law suit. If the job billings and job cost tie back to G/L and contract amounts tie to the contracts, only leaves costs to complete, which should have provided by the client. The rest of the amounts are computations and subject only to compuational errors. Leave aside the classification of the contracts to other considerations. I would and have given up the WIP worksheet on the basis that it is part the client's books and records. Normally the WIP schedule is included in the financial schedules to the financial statements. | |
| 8 February 2008 | |
| Here is your first ref.:
[Section 34-1-21] "Ownership of accountants' working papers. (a) All statements, records, schedules, working papers, and memoranda made by a certified public accountant or public accountant incident to or in the course of professional service to clients by the accountant, except reports submitted by a certified public accountant or public accountant to a client, shall be and remain the property of the accountant, in the absence of an express written agreement between the accountant and the client to the contrary." "(b) A licensee shall furnish to a client or former client, upon request and reasonable notice: (1) A copy of the licensee's working papers, to the extent that such working papers include records that would ordinarily constitute part of the client's records and are not otherwise available to the client. (2) Any accounting or other records belonging to, or obtained from or on behalf of, the client that the licensee removed from the client's premises or received for the client's account; the licensee may make and retain copies of such documents of the client when they form the basis for work done by the licensee." | |
| February 8, 2008 | |
| So, the question is: Is the WIP schedule a client record? I would think it is, just like a depreciation schedule is.
Are you also concerned about the new accountant -- what he or she will think of your work? Is there a relationship there? I think we've all had someone come to us and say, "my old accountant/tax preparer didn't do this right." I always take that with a grain of salt. One client I had last year complained and complained about her old accountant. After working with the client for a few months I understood that a good part of the problems probably were a result of the client and not so much with the prior accountant. | |
| 9 February 2008 | |
| I am worried about what they are saying or will say. I have heard new clients say that to me too. It's just the last exchange I had with them was just not good at all. I was a sole practitioner at the time and they mentioned how they were a big construction company and another accountant would love to have them as a client, etc. etc. This was said when I wouldn't change numbers (to incorrect numbers) for tax purposes (they owed) on Oct. 15th!
I guess here's my main concern. If I send directly to the old client the WIP schedule I prepared and the information (copies) I received from the client to back up those numbers, I wonder if they are dishonest enough to only show my WIP schedule to the new accountant and say "oh no, those are not the correct figures, I don't know where she got those numbers". As nasty as they got on our last talk, I don't doubt that could happen. They don't have a good set of books and if they decide to code expenses or billings to a different job or something, it can look like I screwed up. I also don't want the new accountant to tell them somehow that "yeah, you're right, she screwed up" and make them feel justified. I guess giving them my WIP schedule allows them analyze it without me there to defend myself from what the old client is saying. I would never not want to give over anything under normal circumstances. | |
| February 9, 2008 | |
| I understand how you feel, CS. You work with someone, you know what the right thing to do is, you stand your ground, and then the client moves on to someone else and tries to blame things on you. I think you need to continue to do the right thing, which I do believe includes sending them the WIP schedule. You do not need to return the supporting documents since they were copies.
They may very well say to the new accountant that you messed up. And the new accountant may say, "yeah, she sure did." I have a feeling that my client also said bad things about me when she moved on, but I know I did what was right and have the support to prove it should someone ever ask. I think the same probably applies to you. I think you need to realize you are not always going to be able to defend yourself. And perhaps you need to ask yourself if it really matters. | |
RoyDaleOne (talk|edits) said: | 9 February 2008 |
| Just a comment, I have being construction accounting since 1971, have been sued, turn-in to the state board and lost more clients than I now have. That said, if a client threaten to leave you and that is a problem to you for any reason you should noe being their work. Being a CPA that may have compromised your independence.
Keep on dong the job the way you have been and the way you know how to do and you will be okay, you can slept at night. By the way the client is only in entitled to a copy of the WIP, I would keep the original. | |
Bottom Line (talk|edits) said: | 9 February 2008 |
| How about sending the work directly to the new accountant with a cover letter? (With the client's written permission of course) | |
| 9 February 2008 | |
| Thanks guys! I guess I need to get over it and stop thinking about it and just send the WIP over to them.
Bottom Line - it's a small CPA community down here in my little part of Alabama, so part of me doesn't want to know who the new accountant is for fear I might know them and wonder about what's going on and being said. Goodness, it sounds like I have a bit of paranoia. :) Thanks again! | |
Bottom Line (talk|edits) said: | 10 February 2008 |
| You may not want to know who they are but they'll know who you are. If you really want to be paranoid, think about what they're thinking about you. There again, since it is a small community, they may already know your quality of work and that may raise some questions regarding their new client. | |
| February 10, 2008 | |
| Life is too short to worry about what others think of you. I wouldn't waste another second on it Carey. | |
| 10 February 2008 | |
| I'm addressing the envelope to go to them now. About the new accountant, I will probably figure out who it is later anyway. I won't worry about it.
I feel better though getting it out of the way this morning. Thanks again! | |
Bushmaster (talk|edits) said: | 11 February 2008 |
| Where in Alabama are you located?
PM if necessary. I grew up in LA. | |
