Why I sacked a large firm of accountants

Jul 21, 2015 | Accountants, Client service

The purpose of sharing what follows is the lessons that I hope become apparent. I have no desire to embarrass anyone so I am not identifying the client, the firm or the partner concerned. That’s not the point.


Last year I took over responsibility, on a voluntary basis, for the finances of a members’ club that had long been audited by a top 20 firm. I called the audit partner for a chat and to mention that we would no longer require an audit. Turnover was less than £250k and the bulk of income and expenditure arose from mutual trading. I explained that I had engaged a bookkeeper – my predecessors having done the bookkeeping themselves. All the bookkeeping is maintained on Xero.

We agreed that an independent examination of the accounts, to be drafted by the bookkeeper, would suffice.  That was February. Our accounting date was 31 March.  The partner said that a manager would liaise with me over the timing of the work.

The service

An audit manager got in touch, but not until June, and agreed to send a fee quote, which he did. It was lower than previous audit fees and I assumed it covered all of the services to be provided for the year.

To give the firm credit, everyone who communicated with me and the bookkeeper was efficient, polite and professional. However I never once received a phone call from anyone. Not once. I simply cannot accept that this is best practice.

I find it bizarre that an accountancy practice (whatever the size) can service a client paying the firm many thousands of pounds each year without someone actually talking to their key contact at least once during the annual process. Even more so given that I was new in role.

My conclusion was, as I had anticipated at the outset, that the job was too small for the firm and that perhaps they had been waiting for us to sack them. I have no idea what paperwork is on their files re the accounts review etc but it felt as though they simply went through the process without considering the impact on us as their client. They had a few queries but proposed no changes to the draft accounts prepared by the bookkeeper.

In the event the work involved in preparing our accounts will have taken much less time than in previous years as our new bookkeeper did much of the accounts prep work.

The tax

Someone from the tax department emailed me in November to remind me of filing deadlines and to ask if I wanted them to do their work as usual. I agreed and realised only then that that the fee quotes, supplied in the summer, excluded any ref to the tax work (suggesting the traditional lack of communication between departments that I recall from my own days in practice). No one confirmed what they would do on the tax side. I was pleased however that the tax team seemed on the ball and took responsibility for getting things done.

Remember the client here is a mutual trading body with many annual recurring sources of income. I was surprised therefore to receive a number of queries from the tax team as to the taxability or otherwise of income sources. I suggested that their files or colleagues should be able to confirm which sources were taxable etc. I had my own views too of course.

The club had been client of the firm for many, many years, so it struck me as odd that the tax team were asking basic questions as if new to the affairs of the client. They were otherwise efficient and helpful so I paid the tax fees without query. However no one spoke with me or quoted for the tax fees which were simply charged without any explanation at all.

The upshot

It transpires that the 2014 accounts contained an under accrual for the audit firm’s fees for the year. Whilst they were not auditing the figures I would have hoped that they would have ensured we were adequately accruing for their full charges. Our draft figures for the year to 31 March 2015 therefore have to reflect last year’s under-accrual. Had this been correctly accrued our results would not be swinging from a surplus last year to a deficit this year.

As a side issue I also noted that postal communications from the firm’s accounts and marketing department, more than a year after I took over, continue to be addressed to my predecessor.

All in all the firm did little to cover itself in glory.

The switch

I made the decision to recommend that we replace the firm earlier this year, but thought I would wait to see when they would get in touch to plan the work for our accounts to 31 March 2015. They didn’t.

A few weeks ago I briefed 3 possible replacement firms, all of whom have since submitted fee quotes in the region of half what we paid last year. Two of the firms are in the top 20. One is in the top 30.

I sent an email last week to the old audit partner explaining much of the above. The response I received simply said:

Thank you for your email.
I am sorry to hear that you were not happy with the service you received.
We await your further information regarding our selected replacement.

The questions

Does any of what I experienced surprise you? Do you think I am being too harsh or had unreasonable expectations? I’d love to know.

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