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 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 guidance 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.

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.