Are you a member of any professional body?
Unlike other professions, anyone can open an office and call themselves an accountant, no training or qualifications are required! There are many unqualifieds out there, I suspect that many of their clients don’t realise they are unqualified! You wouldn’t go to an unqualified doctor, so why take a risk with your financial health? If your accountant is qualified, he will normally append the qualification to the firm name, for example, McCleary & Company, Chartered Accountants & Registered Auditors. The main professional bodies for accountants in practice are; Chartered Accountants and Association of Chartered Certified Accountants. Beware of firms who call themselves simply ‘Accountants and Auditors’, they may not have any formally qualified staff!
As members of ‘Chartered Accountants Ireland’, we are subject to regulation and regular independent third party review. This gives assurance that our standards will be maintained. Accountants who are not members of professional bodies do not have this level of assurance, so their quality may suffer.
Who regulates you for Money Laundering purposes?
Accountants are a regulated profession under the Money Laundering Regulations, generally the professional bodies regulate their own members, however, ‘accountants’ who are not members of a professional body are supposed to be registered with HMRC for money laundering purposes. If they are not registered, they are breaking the law.
How do you keep up to date with changes in legislation?
Rules and regulations, especially tax, are constantly changing. Members of professional bodies have a CPD (Continuing Professional Development) requirement to do a minimum number of hours study per year. Any professional who does not do at least this amount of study, cannot possibly hope to keep up to date. An out of date accountant can prove to be very expensive, even if his fee is small!
Who pays your fees in the event of a tax investigation?
Anyone can have a tax investigation, while generally targeted, the HMRC computer selects some on a completely random basis. Investigations are worrying and time consuming, often the professional fee will far outweigh any additional tax that might be due. For this reason we include our Tax Investigation Service in our annual fee. Our firm pays an insurance premium, which means that the insurance company, not the client, will pay our fees in the event of a Tax Enquiry. Some other firms also offer this service, so it’s worth checking if it can be included.
How many times will we meet a year?
Some clients only want a set of accounts and a tax return and are happy to only meet once a year to finalise them, however, if you want to minimise your tax bill, it is better to meet before your year end, when it is still possible to plan, once the year end passes, your planning options are limited. I believe that you should meet your accountant at least twice a year. A pre-year end tax planning meeting a couple of months before the year end, will enable you to discuss advancing expenditure and various other options to legally minimise your tax bill.
What happens if you are unexpectedly absent from the business?
A one man band accountant, working from home, will often be a cheaper option than a slightly larger firm but this option does come with some risks. What happens if your accountant becomes ill just before a deadline? Will your work get done and who will pay any fines or penalties? Members of professional bodies, who are sole traders, are required to have alternates that will stand in for them, although they are often busy dealing with their own clients, so your job may not be their first priority.
Do you have any Professional Indemnity Insurance?
Even in the best firms things can go wrong, firms who are regulated by the main professional bodies are required to have Professional Indemnity Insurance, so that if a client suffers a loss due to the firm’s negligence, they have some redress. Some unqualified accountants also have insurance but not all of them, so it is worth asking the question.
Some business people choose their accountant based purely on price, but all accountants are not the same, you could be comparing apples with oranges! This list is not exhaustive but I’d suggest that satisfactory answers to these seven questions should be a pre-qualifier for developing your shortlist. Price is obviously a consideration but it should not be the only one, in the words of Warren Buffet ‘Price is what you pay, Value is what you get.’