Appointing an accountancy firm
This guide is designed to help you appoint an appropriate firm of accountants. Accountancy firms can provide a number of services to you. FSA-regulated firms need to comply with specific rules and not every accountancy firm will have sufficient experience or knowledge of these to be able to provide good quality advice.
We cannot recommend or promote the services of any particular accountancy firm, but this guide lists a number of questions and issues you might consider before appointing an accountancy firm. This list is not exhaustive and it may be appropriate for you to consider other issues too.
Experience and qualifications
Anybody can call themselves an accountant but the best way to find a good accountant is by ensuring that the accountant is a member of a professional association and by getting a personal recommendation. When reviewing qualifications and experience consider:
- Is the firm a member of a professional association such as The Insitute of Chartered Accountants in England & Wales, Institute of Chartered Accountants of Scotland Institute of Chartered Accountants in Ireland or the Assocation of Chartered Certified Accountants?
- Are they qualified accountants?
- If providing audit services, do they have the appropriate 'registered auditor' authorisation from their professional association?
- Are they experienced in dealing with FSA-regulated firms?
- Do they understand the FSA capital adequacy rules?
- Are they going to be able to advise you with any business plans you have and how these will impact on you ability to comply with the capital adequacy rules?
The accountancy firm's services
When agreeing services to be undertaken by the accountant consider:
- What type and level of service do you need?
- Is the firm or the external accountant best placed to undertake the task?
- How frequently do you want the external accountants to undertake the work?
- Have the services to be provided been set out in a letter of engagement issued by the accountancy firm? Members of professional associations will always issue this letter.
- Will you and the external accountant ensure that the letter of engagement is reviewed and remains 'fit for purpose'?
- What are their charges and are these realistic?
- How many FSA-regulated firms does the accountancy firm work for?
- Do they have sufficient resources to meet your required deadlines?
- How will you monitor the activities of the external accountant and what reports will you expect to receive?
Remember that it is your responsibility to ensure your firm is comlying with our rules, whether or not you use an external consultant and you should ensure you have the appropriate systems and controls in place to monitor the accountant's services.
References
Many firms find their accountant through recommendations. FSA-regulated firms are a specialist area for accountancy firms, so it is important, to ensure that the firm you appoint understands the FSA regulations relating to:
- capital adequacy;
- financial reporting;
- record keeping; and
- client assets (if applicable).
Before you appoint an accountant, consider:
- Their professional integrity, reputation, skills and competence
- Asking for references from other relevant clients?
- Comparing them to other accountancy firms
- Will they add value?
- Checking if any regulated firm they have worked for has been subject to relevant action by the FSA
- Checking that the accountancy firm have professional indemnity insurance and is it sufficient
Examples of poor advice given to firms
In this section we give common examples of poor advice received by firms from their accountants which led to them failing to comply with FSA requirements.
Examples of poor advice given to firms