However, to retain clients, make every effort to minimize as much additional change as possible. • An accountant should understand tax law, and be able to help the individual or business owner take advantage of all legal deductions. A worthy accountant will be able to explain financial statements and other financial issues in a language the business owner or individual understands. If the CPA has power of attorney to represent or act on behalf of the client before the IRS, include your intention to withdraw from such authority in your termination letter to limit your professional responsibility to the client and the IRS.[1]. Do you use any form of accounting or tax software now? This letter will confirm that we have not been retained to perform that service and that our firm has not agreed to render any professional services to you. Under paragraph .07 of §1.400.200 of the AICPA Code of Professional Conduct, Records Requests, a firm’s work product may be withheld if the work product is incomplete. Why CPAs choose AICPA Long Term Disability. Applications for an extension of time to file the 20XX U.S. federal and [State] income tax returns for [Client Name] have been filed with the taxing authorities. This is best done as a part of the regular client service. Contact Us. As of the date of this letter, our firm has the following work-in-process for [Client Name]: [Describe outstanding work-in-process for the client]. (Excel, Quickbooks, Peachtree, etc.) The main reasons for firing an accountant are: • Many business owners and individuals don’t understand financial statements. Be sure to tell the client what could happen if they do not follow up on items noted and that they will be responsible for the consequences of their inaction. The ancient Greek Heraclitus said, “There is nothing permanent except change”. The client addressed in this example is the owner of a small business. Unless the firm resigns from the CPA/client relationship while an engagement is in process, the letter should expressly state that there is no work-in-process as of the relationship termination date. They should also consider the ongoing work and may not want to send a letter to change accountants during an in-process tax return or other serious financial issue. Generally, the letter should contain: An identification of the engagement to which the professional service relates. If the accountant feels insulted as well as fired, he or she may slow the transition process to a new accountant. Dear [Client Name or Authorized Client Representative Name]: As of [Date], [CPA Firm Name] (“firm,” “we,” “us,” or “our”) is terminating our professional relationship with [Client Name] or [Additional Client Names] (collectively, “you” or “your”) and will no longer render services to you. I wish you well in the future. What is Supplemental Health Insurance in Retirement? 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. For example, consider restructuring so that there’s a main point of contact with one or two other backup team members. Continental Casualty Company, a member of the CNA group of insurance companies, is the underwriter of the AICPA Professional Liability Insurance Program. Even if you decide to inform the client of your resignation verbally, a follow-up letter evidences the discussion. Before firing an accountant, the individual should have another accountant or accounting firm ready to immediately step into the position. Doing Business in the Cloud? Who is eligible for Long Term Disability? We would like to sincerely thank you for choosing [companyname] to service your tax accounting needs. As a result, regardless of your expectations regarding collection, a termination letter should state the amount of fees due or state that a balance is not due. The best way to determine if the accountant is honest is for the individual to ask the accountant to teach the basics of accounting. The letter should be polite and formal. It is our mission to do everything possible to help you reach your business and financial goals. 239 CPA Firm Mergers & Acquisitions: How to Buy a Firm, How to Sell a Firm… It is not necessary to give a reason for the change. You may access copies of records in the portal up to this date. In addition, CNA does not endorse any coverages, systems, processes or protocols addressed herein unless they are produced or created by CNA. Partner. Plan for Your Future with Life Insurance, Experience life’s ups and downs with premiums that stay the same, Why It’s Important to Name a Beneficiary. To remain with our firm, please sign the second line at the end of this letter, and return the letter to this office. Client Information and Responsibilities. The first paragraph of the letter should clearly indicate that the client relationship is being terminated, note the effective date of termination and provide the status of services agreed upon in previously issued engagement letters. If the accountant has a legal contract for employment, changing accountants must be done according to the terms mentioned in the contract. the end of this letter, and return the letter to this office. (NOTE: You may choose instead to enclose separate consent or authorization forms for the client to sign and return.) At times, clients assert that CPAs knew they did not provide proper service because they did not bill for their time or follow-up on outstanding fees. Some CPA firms may indicate who will be staffing the engagement. 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. Accordingly, this article should not be viewed as a substitute for the guidance and recommendations of a retained professional. Smaller clients might only receive the letter. We have enclosed all of the original records provided to us for [Client Name]. What are your expectations of our firm? Do you have enough life insurance for your stage in life? If the accountant feels insulted as well as fired, he or she may slow the transition process to a new accountant. When a person is planning to retire and he or she would like to inform their clients that they will not be working with them in the future, they need to write a formal retirement letter even if they have discussed the situation in person or over the phone. 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