Certified public accountants (CPA) are required by many individuals and businesses to file taxes and an analyze financials. “CNA” is a registered trademark of CNA Financial Corporation. This provision may prove helpful, for example, where a client expects to work with certain employees of the CPA firm. When it becomes necessary to terminate a client relationship, it is important to confirm this action in a letter to the client to avoid future ambiguity regarding the status of the relationship. Certain CNA Financial Corporation subsidiaries use the “CNA” trademark in connection with insurance underwriting and claims activities. The letter should clearly map out the client's responsibilities going forward and issues that should be raised with a successor CPA. Phone: (734) 455-4802 Fax: (734) 455-1655 Email: info@fantcpa.com Doing this is an ethical violation and may be against the law if the accountant destroys a client’s files or intentionally makes the transition process to a new accountant more difficult. Dixon advises accountants need to be clear in anethical letter about the records they are seeking. Unfortunately, some accountant would like their employer to stay in the dark about their financials, thinking this gives the accountant job security. If deadlines are missed or a theft occurs and the CPA had not informed the client of those in writing, the client may blame the CPA firm. We previously returned all original records you provided to us in connection with previous engagements to you. CPAs who are Good Defensive Drivers Still need Personal Umbrella Insurance! They should be able to teach simple methods that will save their client’s money. Firms should begin now to support ... CPA FIRM SUCCESSION … Accountants may not be regulated in all states but CPAs are. Firm-loyal client bases are not at risk to the same extent. It is essential that the tax return is accurate or there could be serious repercussions with the Internal Revenue Service (IRS). I have engaged Name of Company to take over the financial accounts of my business and would appreciate it if you give all the information they require when they write to you within the next two weeks. Do you have enough life insurance for your stage in life? In the event any portion of your 20XX income taxes remains unpaid, underpayment penalties and interest continue to accrue on these amounts. The letter should briefly state the status of outstanding fees, even if fee collection is unlikely. The letters you send to clients announcing a merger or acquisition should reassure in order to retain. I have been very satisfied with the service I received from you, and this termination of services is in no way an expression of dissatisfaction. Further, in the event your 20XX tax returns are not filed by the due dates, additional penalties and interest may be assessed, and you will be responsible for them. [Name of Authorized Client Representative Name]. If these are not followed, the accountant or accounting firm may be able to take legal action because a breach of contract. Here is sample text of an effective letter (edit as needed). Just Married? This appendix includes five sample letters for a sale or affiliation and two for a merger that firms can use to present the transition in the right light. In most engagements, the client is required to collect certain information and provide certain records to the CPA. Understanding financial statements and tax codes is a skill that takes time to learn. This is why they employ an accountant. Time commitment of the seller to the transition. We will consider any requests for copies of documents in our working paper files from you or the successor firm. _____ 8. But that doesn’t mean clients like change. Doing Business in the Cloud? In addition, CNA does not endorse any coverages, systems, processes or protocols addressed herein unless they are produced or created by CNA. The letter should be polite and formal. Matters of particular importance to include are deadlines (statutory, regulatory, or operational), internal control weaknesses or breakdowns and indicators of potential fraud or violations of laws and regulations. CPAs that are not familiar with third party verification requests should count themselves lucky. The ancient Greek Heraclitus said, “There is nothing permanent except change”. If it is suspected that the accountant committed an ethics violation the state CPA association or accounting association should be informed. 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