Professional Obligations When a Client Relationship Ends

There may come a time when a client relationship ends. In such instances, CPA practitioners are reminded that they need to ensure they discharge their professional duties in line with the provisions of the CPABC Code of Professional Conduct (“the Code”).

What are my obligations as the predecessor when my client leaves?

Rule 302.2 of the Code notes that “A registrant shall respond promptly to the communication referred to in Rule 302.1.” As the predecessor accountant, you are required to promptly respond to a takeover letter.

Rule 303 of the Code notes the requirements to return client information when requested to do so. Rule 303.1 notes that “A registrant shall, upon written request of the client and on a timely basis, supply reasonable and necessary client information to the registrant’s successor. Such co-operation is required with any successor accountant (“successor”), including a non-member.”

My former client has an outstanding invoice with me. Do I still have the obligation to respond to the takeover letter and provide client information to the successor?

The responsibilities as outlined under the Code should be adhered to regardless of any outstanding amounts from the client. Specifically, the predecessor shall communicate under Rule 302 and should not withhold client information due to unpaid fees under Rule 303.

I, as predecessor accountant, am aware that there is a circumstance that the successor may want to know about, but I am not sure if I can disclose it in my response to the takeover letter. What can I do in such instances?

Per Rule 302 in our Code, you need to ensure you do not violate confidentiality. The issue with the client should be considered confidential. The predecessor would note to the successor that there are possible circumstances that should be considered, but that the Code’s confidentiality prevents the predecessor from discussing these directly with the successor and that the successor should obtain permission from the client to obtain such further information from the predecessor. Once the client provides you with this permission you can discuss it to the extend necessary to comply with Rule 302. If the client does not permit you to discuss the possible circumstances with the successor, the successor may interpret this denial of permission as a reason not to accept the client.

I, as successor, have sent a takeover letter to the predecessor accountant who is not responding. The predecessor accountant is also not providing client information that has been requested. What can I do?

We encourage you to share this document with the predecessor to remind them of the requirements under the Code. Failing that, you can reach out to the CPABC Professional Advisory team at professionaladvisory@bccpa.ca, and we can send the predecessor practitioner a courtesy email, again reminding them of the requirements under the Code. The courtesy email will note that you contacted us and will ask the CPA practitioner to comply with their responsibilities under Rules 302 and 303 of the Code.

I, as the successor accountant, have just sent an email to the predecessor accountant asking for the return of client information but have not received a response. What can I do?

As the successor, you should ensure the client has provided their request to the predecessor to release the client information, not you. This is also to ensure confidentiality is not breached. Where the request has been made by the client and there is still no response from the predecessor, you can reach out to the CPABC Professional Advisory team at professionaladvisory@bccpa.ca, and we can send the predecessor practitioner a courtesy email, again reminding them of the requirements under the Code.

The predecessor is currently incapacitated and has not responded to my takeover letter. What are my responsibilities in this case?

Please refer to Communication with Predecessor - In the Event of Incapacitation of the Predecessor for guidance for such circumstances.

The successor has requested for the return of client information. What constitutes client information?
Please refer to Engagement File Document Categories – Client Information, Proprietary Information, Work Product for guidance for such circumstances.

The predecessor is not a CPA, am I still required to send a takeover letter?

Rule 302.1 applies to instances “where the successor is replacing another registrant or other professional (“predecessor”)”, therefore this would include non-members as well. Non-CPA members are not bound by the Code so their compliance with Rules 302 and 303 might vary. Regardless, it is your responsibility under Rule 302.1 to take “reasonable steps to communicate”.

Does Rule 302 apply to tax engagements?

Rule 302 is applicable to any “engagement with respect to the practice of public accounting or the provision of a professional service not inconsistent therewith”. The practice of public accounting per the Code “means, except in Rule 204, the provision of any services included in “public practice” as defined in the bylaws”. Public practice includes other regulated services such as tax compliance services e.g. T1s and T2s. Therefore, Rule 302 is applicable for tax engagements.

Practitioners are also reminded of their responsibility as it relates to rescinding access to client information in instances when a client relationship ends (Rule 208). Please also refer to guidance on Rescinding Access to Client Information.

Further Questions?

Should you have further questions about the above please contact the Member Advisory Services team at professionaladvisory@bccpa.ca for additional guidance.

The information in this document was current and accurate when it was published (see date at the top). While we try our best to update and remove old documents, there is a chance we miss some. Always refer to the most recent version of the Act, Bylaws, or Code (linked) posted on the CPABC website as the wording therein prevails over information in this document. If you think we did miss an update or removal, please confirm with us at ProfessionalAdvisory@bccpa.ca.