Question: "The firm has been supplying accounting services to a client company for over a year and has not been paid - £10,000 fees outstanding for last year's annual accounts (unaudited) and monthly management accounts. The client has recently ended their relationship and approached a new firm of accountants to do the required work for their bankers. There is no dispute over the fees, indeed some have been paid on account and in the client's letter terminating the relationship they offered to make payments on account when funds permit - the issue is they do not have the money.
The new firm has written to us requesting professional clearance for the engagement, and to be informed of the outstanding fees. The new firm still want to proceed with the engagement and have requested information from us. (The only company records still held by the firm are the statutory books, which the client has been informed he can collect at any time.)
Can the firm not supply information to the new accountants until the outstanding fees have been paid, as per the Code of Ethics paragraphs 210.16 and 240.4f?"
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Question: "The firm have resigned from an audit client that has been causing problems and issued a statement of circumstances. This refers to unpaid fees and a breakdown of relations with the client.
The firm have now received a professional clearance letter from the new accountants and a request for information.
How should we respond?"
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Question: "How is the limitation of liability clause for non-audit services in an engagement letter normally used, given that we have a new client and have no idea of the level of fees which will be charged in the first year?"
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Question:The firm is considering whether to be the auditor of a company in which a partner in another office has a close family connection. The close family member (not blood relative but by marriage) has a 30% shareholding in the potential client.
What are the ethical considerations in these circumstances?
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Question: I am in the process of drafting a handover letter to the previous accountants of a new client. I have read an article about some conflicting views regarding authority from the client.
In the past we have not sent the client's authority, but a number of accountants are requesting this. Do we need to send this authority?
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