A CA's guide to avoiding complaints
The ICAS Investigations Team has prepared a series of short articles to help members avoid common complaint issues that can arise over the course of a client relationship.
If you would like to speak to someone in the Investigations Team regarding a potential issue or complaint, please contact our helpline on: 0131 347 0271 or send an email to: firstname.lastname@example.org
Top tips: how to avoid marketing complaints
However you choose to grow your business – whether it be by expanding your service lines, or acquiring new clients – your marketing strategy will likely play a key role in its success. But did you know that getting your marketing wrong could lead to a complaint being raised against you to ICAS?
Beyond the requirement to comply with the advertising codes which apply in the UK, the ICAS Code of Ethics (“the Code”) sets out additional requirements for CAs seeking to market their business. The fundamental principle of professional behaviour, as set out in the Code, imposes an obligation for all CAs to comply with relevant laws and regulations, and to avoid any action that the CA knows, or should know, may discredit the profession. This article looks at a CA’s ethical obligations when marketing themselves, or their firm, and what can be done to safeguard against possible complaints.
- CAs must ensure that they meet their ethical requirements when marketing their services.
- CAs should not make disparaging references or unsubstantiated comparisons to the work of other people.
- Positive statements about the benefits a CA can bring to a client’s business are generally better received than criticising other accountants.
- Engage with the ICAS’ 'Make Sure Your Adviser is a CA' initiative, which focuses on raising awareness of the value of Chartered Accountants as leading business advisers.
What does the Code of Ethics say?
Section 250 of the Code – ‘Marketing professional services’ – provides guidance to CAs in practice. In particular, Section 250.2 of the Code states:
“A professional accountant in public practice shall not bring the profession into disrepute when marketing professional services. The professional accountant in public practice shall be honest and truthful and not:
(a) Make exaggerated claims for services offered, qualifications possessed, or experience gained; or
(b) Make disparaging references or unsubstantiated comparisons to the work of another.”
While a common-sense approach may be enough, in practice, there are some areas where a CA can stray into making claims or comparisons that could be deemed unprofessional.
Great care should be exercised when producing promotional material which draws comparisons with accountancy firms. Section 250.2 of the Code requires that such comparisons:
- Are objective and not misleading;
- Relate to the same services;
- Are factual and verifiable; and
- Do not discredit or denigrate the practice or services of others.
Unsubstantiated claims by a CA could lead to a complaint for being associated with false or misleading information.
Avoid disparaging references
One of the most common causes for complaints related to marketing stems from allegations that a CA has made disapproving comments to a client about another accountant. Claiming that you can provide ‘a better service than X’ or ‘that X cannot provide a good service’ could result in a complaint being made against you; even though you might believe you have facts to support your statements.
It is important to note that the restriction on making disparaging remarks applies equally to remarks about unregulated accountants as it does to remarks about fellow CAs. It is far more valuable to promote the benefits that you, as a CA, can bring to a business; rather than highlighting the perceived shortcomings of using another accountant.
ICAS’ 'Make Sure Your Adviser is a CA' initiative focuses on raising awareness of the value of ICAS Chartered Accountants as leading business advisers.
Reference to fees
If reference is made in promotional material to fees, the basis on which the fees are calculated, or to hourly or other charging rates, then take care to ensure such references do not mislead as to the exact service being offered, and the time commitment that this covers. This is particularly important where your feeing structure varies from the standard ‘time and line’ basis. Further guidance on fees is available in Section 240 of the Code ‘Fees and other types of remuneration’ and in our previous article ‘Top tips to avoid fee complaints’.
There is a common misconception that CAs cannot cold call clients. While there are varying views on the suitability of cold calling – and its effectiveness is certainly open to question – it is not prohibited under the Code.
Be careful not to harass
CAs should be careful that their attempts to contact potential clients do not amount to harassment; particularly when delivering follow-up marketing material. In recognising that harassment is subjective, you should bear in mind that people will have different levels of tolerance for such contact.
In addition to staying on the right side of the Code, CAs must also ensure that their approach to marketing complies with recent changes in the laws for processing personal data. While businesses may be able to argue, under GDPR, that they have a ‘legitimate interest’ in using personal data for marketing – and therefore don’t need consent – consideration must also be given to separate e-privacy legislation, which makes it more difficult to market services by email without consent.
Further ethical guidance can be sought from the Investigations Department on 0131 347 0271. For more information on our ‘Make Sure Your Adviser is a CA' initiative – as well as data protection issues – please contact the ICAS Practice Support team on 0131 347 0249.
Top tips to avoid complaints related to Practicing Certificates
Each year ICAS receives complaints of Members practising in the absence of a Practising Certificate (PC), in breach of the Public Practice Regulations.
In recent years, the Investigation Committee has disciplined a number of CAs for practising without a PC, with disciplinary sanctions ranging from a formal written warning to an order of reprimand at the higher end of the scale. With findings carrying a financial penalty and publicity of the outcome, the consequences for CAs not complying with the requirements can be far-reaching.
This article takes a look at a CA’s obligations to hold a PC and key points to consider to avoid falling foul of practising without a PC.
When is a PC Required?
In the most straight-forward of cases, if you are planning to set up your own accountancy business, a PC is always required. It is important that if you are a principal in a firm providing accountancy or related services, or you intend to set up your business in this way, you contact ICAS to obtain a valid PC to cover your business activities and meet the requirement to hold professional indemnity insurance (PII).
Yet, CAs are often under the impression that they do not require a PC unless they are a principal in an accounting firm; which is not the case. Generally speaking, if a CA provides accountancy or related services to someone other than their employer, and are paid for the services, then they are deemed to be in public practice and are required to hold a PC to cover their work.
The remainder of this article covers some of the common misconceptions about when a PC is required.
A common misunderstanding is when work is undertaken for charities on a voluntary basis. CAs do not require a PC if they provide accountancy services to small charitable bodies, or to similar non-profit making bodies, as long as:
- they are not conducting the work ‘by way of business’;
- are either carrying out the work free of charge, or for a nominal fee of £100 or less per engagement; and
- are subject to a maximum of ten of these type of appointments in a year; If the CA does not meet all the above requirements or undertakes more than 10 appointments in one year, then they will trigger the need for a PC.
The CA should ensure that they have the professional knowledge and skill at the level required for any voluntary work that they undertake.
It is possible for CAs to carry out an independent examination for a small charitable body without a PC, as long as the body qualifies as small (currently defined as gross income of £500,000 or less) and the work is undertaken without charge or for a nominal fee of £100 or less, subject to the maximum limit of ten voluntary appointments as above. Where such work is carried out in the absence of a PC, it is important to inform the trustees in writing if similarly, no PII cover is held. Failure to do so could potentially lead to a complaint being raised against the CA.
Audit work requires additional authorisation
It is important that no audit work is ever undertaken in the absence of a PC. Not only does audit work always requires a CA to hold a PC, but additional authorisations are needed to be an auditor. In the UK only Registered Auditors can conduct audit work. There are no exceptions to this rule. Further guidance on becoming a Registered Auditor can be found at icas.com.
Subcontractor and consultant roles are more complicated as there are many different variations in these type of arrangements. Whether a CA requires a PC depends on the nature of the contract with their firm or client and who is bearing the risk if something goes wrong.
In simple terms, if the CA bears the risk, then a PC is required. If the firm/client bears the risk, this would indicate that they are taking responsibility for the CA’s work, akin to an employment contract, and it is less likely that a PC would be required. In a bid to safeguard against a complaint of practising without a PC, CAs are encouraged to contact ICAS for advice if there is any doubt over whether a PC is required.
CAs are routinely asked to accept board appointments due to the well-rounded skill set they possess. CAs are not considered to be engaging in practice if they act as a trustee, treasurer, committee member or board member. In these types of roles, Members are considered to be acting as an ‘officer’ of the entity in question and therefore are not ‘in practice’ and do not require a PC.
Further advice on whether a PC is required, including answers to commonly asked questions, is available at icas.com.
Top tips to cut client communication complaints
A common feature of complaints received by the ICAS Investigations Team is the claim that a Member has failed to respond to their client or a fellow accountant in a timely and courteous manner.
The aim of this article is to outline simple steps that can be taken to ensure clients are satisfied with the level of communication they receive from their accountant, and also to emphasise the risks of failing to communicate with ICAS, or refusing to co-operate with the investigation of a complaint.
We are confident that if all our Members take note of the points highlighted; communication-related complaints received at ICAS will fall significantly.
- ‘Failure to respond’ a common complaint area.
- Adopt some simple rules to ensure clients are satisfied.
- If in doubt, contact the ICAS Investigations Team
Establish realistic service expectations
Define service parameters at the outset of the engagement and eliminate any expectation gaps at the beginning of your client relationship. Making sure you’re all on the same page is a good way of preventing issues before they even begin.
Co-operate with other accountants
Issues often arise when a client decides to change accountant. Whilst we appreciate that it may be frustrating that the client has decided to terminate your relationship; this doesn’t mean that communications from a fellow accountant should be ignored. All of our Members need to remember that the Code of Ethics requires an outgoing accountant to co-operate with the incoming accountant.
Be clear about right of lien
It is important to note that if you intend to exercise a right of lien over client records, this should be explained clearly to the client or the new accountant at the earliest opportunity to avoid matters escalating. If you have any doubts over rights of lien, please consult our Right of Lien Helpsheet.
How to respond to challenging clients
We sometimes have to deal with perplexing clients who never appear to be satisfied with the level of communication they receive. Be assured that we know it is not realistic to expect you to answer emails sent in the middle of the night or to pick up every call you may receive from a particularly demanding client. In these circumstances, we would expect you to provide these clients with a reasonable level of response. If you genuinely consider that you can’t provide a detailed response immediately, consider issuing a holding response, and be sure to give the client a realistic understanding of when their query will be addressed in full.
Establish a second point of contact
It is a good idea to have a think about who the client can speak to in your office in your absence. It can be very useful to give clients contact details for other members of staff who can assist them with their affairs. If even their query can’t be answered, a client is likely to be happier if there’s someone to speak to in your office.
Co-operate with our team
In a small number of cases we find that Members have not co-operated with the Investigations Team and have ignored the Case Officer’s correspondence when a complaint has been made. By failing to co-operate with a member of the Investigations Team, Members are in breach of the ICAS Investigation Regulations and could be liable to disciplinary action. In some cases Members have been excluded from membership for their failures to respond.
Please don’t stick your head in the sand, as the complaint won’t go away without your input and assistance.
Respond in good time
Please ensure that if you do receive a complaint from the Investigations Team at ICAS, you respond within the stipulated timescales and assist the Case Officer as much as you can. This will demonstrate your willingness to co-operate with the investigation.
We believe that by drawing your attention to the simple steps outlined above, the possibility of you becoming subject to an ICAS investigation or being subject to a disciplinary action will be significantly reduced
The Investigations Team at ICAS provides assistance to Members and also offers ethical advice. If you are experiencing any communication problems or have any concerns, please contact the team for advice at the earliest opportunity on 0131 347 0271.