By Michelle Stevenson

For chartered accountants, having a complaint made against them or their firm can come as a huge blow. It could cause reputational harm and possibly result in other types of harm, such as financial loss.

The Chartered Accountants Australia and New Zealand conduct team observes that many complaints made against CAs stem from a lack of client communication.
A communication breakdown can cause serious pain – for all involved.

“Often, what actually underlies the complaints isn’t really a major departure from ethical standards or significant negligence, but a breakdown in communication,” says Rebecca Stickney, leader of CA ANZ’s Professional Conduct team in New Zealand.

By failing to adequately communicate with clients, small issues can quickly spiral out of control.

Stickney recalls a case where a CA failed to adequately communicate to a client that there would be a delay in completing their end-of-year accounts and tax returns, and that there would be significant tax to pay. This went on over a long period, which ultimately saw the client hit with significant late filing penalties and use-of-money interest (UOMI) from Inland Revenue, as well as unpaid tax.

Stickney says this sort of thing can often be avoided, provided that problems are shared from the outset.

“If the CA had talked to their client about the delay or issues they were having in completing the work, the client could have made other arrangements and, indeed, the CA could have sought some help to resolve the situation.

“Instead, the member kept covering up their mistake and manipulated the information provided to the client, which made the problem much bigger than it ever needed to be,” she says.
“So it went from a negligence case to something that then brought into question the CA ANZ member’s integrity and they lost their membership as a result... The lessons to take from this case are that a problem shared is a problem halved and do not cover mistakes with untruths.”

Be proactive and clear from the get-go

Kate Dixon, CA ANZ’s conduct and discipline manager in Australia, says the key to avoiding complaints is to be proactive and clear about your services and timelines from the outset (see “7 things you must always tell a client”).

Dixon recalls a case where she received a complaint about a member who not only failed to complete a client’s tax return on time, but also failed to respond to the client’s enquiries about the delay. When Dixon reviewed the member’s professional history, she discovered the same thing had occurred previously.

“It is possible that this particular practitioner didn’t have a strategy for communicating with clients about delays and for dealing with the workload of responding to their enquiries,” says Dixon.

“How much simpler would it have been if the firm had a proper strategy in the first place? And for the client, if the only way he can get action or a response is by making a complaint, that’s not creating a very good image for that particular member or the membership as a whole.”

If the engagement scope or deliverables change, then this should also be communicated as clearly as possible, and on a timely basis. Failure to do so can result in complaints or make a complaint harder to defend.

In addition to clear communication regarding services, timelines and delays, accountants need to communicate how fees will be calculated and the billing arrangement – and advise clients without delay of any changes to either.

Communicating any limitations in service is another crucial aspect of a CA’s client relationship, as this falls into the ethical principle of professional competence and due care. For example, if a client is looking for a specialist in a particular field, CAs must be upfront with the client about whether they are actually qualified to do that particular work.

Watch your tone

The other issue that often arises with regard to client communication is tone. This is particularly evident in email dialogue, says Stickney, especially if there is tension building with a client.

“My advice is to write the email but wait overnight before you send it – just take a breather,” she says.

“Maybe the client’s annoyed about something. Instead of just dismissing it or rattling off an email, would you be better to take the time to get on a phone call and sort it out? Try to deal with disputes as constructively and professionally as possible.”

De-escalating the problem may help salvage the client relationship. Dixon and Stickney recommend all members in practice implement a complaint-handling policy.

Even if you do everything in your power to avoid causing complaint, you should still implement a complaint-handling policy, says Dixon.

“We see members where the client’s distress or agitation is just a bother, whereas if members had an attitude of being upfront and addressing issues properly, it may be less of a problem,” she says.

“A complaint-handling policy is a must. If a firm has such a policy, then everyone in the firm, when they receive a complaint, knows what to do. It also should mean that people are aware of the fact that issues can result in complaints, and so can actually be proactive in resolving problems.”

In Australia and New Zealand, there are professional standards for quality control: APES 320 Quality control for firms and PS-1 Quality control respectively. These standards require a firm to establish policies and procedures that mean they deal appropriately with any complaints or allegations that the firm’s work doesn’t meet the applicable standards and requirements. The concept of a firm is broadly defined in the standards and includes sole practitioners.

A complaint-handling policy is a must. If a firm has such a policy, then everyone in the firm… knows what to do.”

Maintain your professionalism

The best way to ensure effective communication with clients – and avoid complaints – is simply to maintain your professionalism at all times, says Stickney.

“There isn’t a magic to this. Treat your clients the way you want to be treated. If you were off raising a complaint with your lawyer about a bill, for example, you’d want them to deal with it openly,” she says.

“There isn’t a magic to this. Treat your clients the way you want to be treated.”

A big part of maintaining professionalism is being organised, observes Dixon. It should be “a way of working” for chartered accountants, she says, particularly at busy times such as tax season and the end of the financial year.

While most clients understand that some periods are naturally busier than others, it pays to be prepared well in advance of those peak times. This includes having adequate resourcing and proven systems in place to manage the workload. It also means being upfront with clients about your capacity to complete the work in a reasonable time.

“If you are in a peak time and there are going to be delays, it’s about making sure that clients are aware of that so that, if need be, they can make alternative arrangements if it’s not going to work for them,” says Stickney.

“So you have to balance up a risk that the client might move elsewhere versus the reputational harm, and possibly other types of harm, if you can’t deliver on what you’ve said you will or if you cause them to incur late penalties.”

7 things you must always tell a client

Seven specific issues that CAs need to be especially diligent about communicating to clients:

1. Work completion delays.

2. Changes in personnel.

3. Changes or increases in fees and/or billing arrangements.

4. Update requests.

5. Limitations in service or expertise.

6. Termination of services, possessory liens (where a creditor has the right to possession of a property until the debtor has satisfied the debt) or handing over records.

7. Changes to engagement scope or deliverables.

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