Possible fraud?

[House of Silver]

Hi,

About 3 months ago we got new accountant. She appointed an accounts manager for us. Recently we came to a conclusion that no such a person exists as our accounts manager. Somebody else, most likely accountant herself was emailing us under accounts managers name. When we demanded to talk on the phone to our accounts manager, she screamed and said that she's is not our accounts manager any more and we deal only with her. Also, it seems that our accountant has little knowledge as she submitted wrong VAT return. Are we victims of fraud? We haven't paid anything yet and got a new accountant from large company. However we got large bill for services we never asked or received from her and she's threatening with legal action if we don't pay. Any advice would be much appreciated.

P.S. do we need to alert police as we are extremely concerned that the sensitive information (bank details, address, etc.) she's got about us. It's true, we haven't been defrauded yet, but could it be considered as fraudulent activity? The 'accountant' comes from east europe. Should we take any steps to safeguard ourselves?

 

[Newchodge]

Is your ex accountant a member of a recognised accountancy body?
Did she send you a letter of engagement?

 

[gpietersz]

More details. Was the accountant an employee or external. Ditto for the accounts manager.

Is the accountant properly qualified and have you checked she is a member of a professional body?

When you say "comes from east europe" do you mean she is working from there or just of Eastern European origin.

 

[japancool]

It could just be incompetence, not fraud.

 

[Paul Norman]

This is not fraud. Fraud is a very specific criminal offence.

What this is, however, is properly awful customer service with an unhealthy dose of sheer incompetence.

You need a new accountant.

Today.

As a matter of considerable urgency.

 

[House of Silver]

She is of Eastern European origin residing in the UK. She is not our employee. ICB member only (though on their website there's old address, so don't know if still member). Again, don't know about qualifications, though on website she claims to have some Bulgarian qualifications. When we confronted her, she still claims that the accounts manager is her employee but would not produce her. We are absolutely sure no such person exist. She's become very rude and insulting and when we called and asked to speak to our accounts manager, she said that person is not our accounts manager any more and hung on us. We feel confused and don't know in what we got involved. Is this a case to report to police?

 

[Frank the Insurance guy]

Also, it seems that our accountant has little knowledge as she submitted wrong VAT return.

Firstly - get yourself a new accountant urgently!

Then you can look at whether this needs reporting to the appropriate body/police etc.

 

[House of Silver]

We got new accountant already. again, she issued professional clearness letter to new accountant. Then she emailed them again two days later saying that she's not issuing one!
We can't believe this is happening.

 

[Newchodge]

We got new accountant already. again, she issued professional clearness letter to new accountant. Then she emailed them again two days later saying that she's not issuing one!
We can't believe this is happening.

Ask your new accountant for their advice

 

[House of Silver]

A question to accountants. I would much appreciate the answer. She claims she's done 5 months books for us, however would not produce them. I have indicated earlier that according to the contract I'm prepared to pay if they are up to standards (however considering VAT mess up, little chance of that). However she demands payment upfront. Is this the case usually that you need to trust and pay upfront? Also, she's charging us for emailing new accountant (prof. clearance letter) £30+VAT per email. Is this an usual practice? We had few accountants before but never heard of charges during handover.

 

[House of Silver]

This is not fraud. Fraud is a very specific criminal offence.

What this is, however, is properly awful customer service with an unhealthy dose of sheer incompetence.

You need a new accountant.

Today.

As a matter of considerable urgency.

Could it be that this was fraud in progress but we just discovered before we got defrauded? Do we actually need to be defrauded to go to police? How common is that an accountant invents a fictional 'accounts manager' and communicates through her? What is the purpose of it? Very concerned.

 

[Mr D]

Technically anyone you give personal or commercial details to can defraud you.
Most won't.

You could report her to the police however unless a crime has been committed they won't be able to do a lot. And may have thousands more urgent issues to deal with.

At the moment there is a bill. That would be a civil issue.

 

[Paul Norman]

The police are really busy right now. An 87 year old chap just snuck up to 31 MPH in the Front Street and Mrs Turner at number 7 is suspected to have had her mum over for tea.

So they are not going to have resources for this.

I wouldn't get involved in that. Your priority is to get your own books sorted, and the best person to advise on that is your new accountant - a huge well done for moving on swiftly there.

The behaviour of your old accountant is neither usual, nor ethical. If they are a member of a professional body, that body might be interested to hear of this - but that won't get your books sorted any quicker.

Unfortunately, with regard to the bill, that is going to be a negotiation between you, and your accountant doesn't sound like the negotiating kind.

 

[Mark T Jones]

Fraud is a term that people love to bandy about to cover any sort of financial difference - in reality it is an incredibly difficult crime to prove, requiring a high level of forensic evidence.

Getting plod engaged in fraud is like teaching a goldfish quantum physics.

Stop wasting your time & energy

If you can demonstrate / quantify direct or concequential loss, go to small claims or MCOL.

If they are asking for money and you feel you shouldn't pay, let them take you to court.

Beyond that, move on and get on with your life & business

 

[House of Silver]

Fraud is a term that people love to bandy about to cover any sort of financial difference - in reality it is an incredibly difficult crime to prove, requiring a high level of forensic evidence.

Getting plod engaged in fraud is like teaching a goldfish quantum physics.

Stop wasting your time & energy

If you can demonstrate / quantify direct or concequential loss, go to small claims or MCOL.

If they are asking for money and you feel you shouldn't pay, let them take you to court.

Beyond that, move on and get on with your life & business

We can move, sure, however she'll make other's life miserable.

 

[paulears]

Your new accountant will tell you if you have incurred any losses throughs your accountants behaviour. If you have the accounts information you have passed to the new one, then perhaps you could take action for the recovery of any costs due to their negligence? However - if the new accountant is happy, then forget it and move on. It will be the accountants looking at financial decisions made by somebody clueless that might bite you I suppose - but surely, these are mostly just fixable? If you have over or underpaid HMRC this is fixable.

 

[OldWelshGuy]

I think it's a case of a lack of due diligence and a contract.

Proving intention to commit fraud is nigh on impossible given that you don't have any information to go on.

As stated above speak to your current accountant, move on, and defend in court if she claims against you.

 

[WaveJumper]

She is of Eastern European origin residing in the UK. She is not our employee. ICB member only (though on their website there's old address, so don't know if still member). Again, don't know about qualifications, though on website she claims to have some Bulgarian qualifications. When we confronted her, she still claims that the accounts manager is her employee but would not produce her. We are absolutely sure no such person exist. She's become very rude and insulting and when we called and asked to speak to our accounts manager, she said that person is not our accounts manager any more and hung on us. We feel confused and don't know in what we got involved. Is this a case to report to police?

It's a shame you never paid more attention to the due diligence before you engaged with your old accountant, hopefully you did this with your new one and they can sort this mess out for you.

 

[simon field]

We can move, sure, however she'll make other's life miserable.

Let the ‘others’ worry about that, nothing you can do will make any difference.

 

[Mr D]

We can move, sure, however she'll make other's life miserable.

However you cannot stop her doing that.

 

[Spur Support Services]

Have you got agreed engagement terms and a price for the work? Is it based on a fixed price or an hourly bookkeeping fee?

If she has done the books for 5 months, then she may have already performed a lot of valuable work.

It is likely that she is using an online accounting system. So ask her if she is able to transfer the subscription for whatever bookkeeping system she is using to you when you leave her and preferably give you "read only" access in the interim.
These are your books and records. You need access to them both now and in the future. Your visibility may also help control the handover to the new accountants, as they can either use the same system or migrate any necessary balances/data.

If she is unhappy to do this before payment, then ask her to demonstrate through a screen sharing Zoom call that the work has been undertaken to give you more comfort that she has worked on your books.

Her loss of Accounts Manager may be due to Covid19's effect on her business and she sounds as if she is highly stressed. However, your loss of confidence in her means that your change of accountant is completely understandable.

As a point of note, I know many Eastern Europeans living here the UK who are excellent, so that point is totally irrelevant. I am also aware of many friends, from all over the world, who haven't been able to visit their families overseas for so long due to Covid19, that it is really causing them personal anguish. So please be kind when you speak with her. It is a really horrid time to be isolated from your loved ones.

You need to aim at a clearly defined handover, so that there is no duplication in work (and therefore costs) for your business.

Discuss this with your current bookkeeper, calmly, to agree to complete the books to the end of the month that she is working on, ensuring that there is a clear deadline for her completion of the work and accept her charges for the completing those bookkeeping services gracefully.
In view of your lack of confidence in her VAT work, ask her to exclude any VAT return work, but this may accelerate you deadline to ensure that you remain compliant.

Speak with your new accountants, so that you can plan with them on how the accounting system is transferred to their care. Ensure that you understand if they will be using a different system and what they will do which is different to your current bookkeeper.
It doesn't sound as if your current bookkeeper has been with you for very long, so also consider where your records previous to her appointment are stored.

Ensure you and your new accountant have clear expectations of how your relationship will work, both now and in the future.

Also you mention that she filed the "wrong VAT Return". This should be impossible under Making Tax Digital, although I'm not sure how it could be done under the old HMRC online system either. Ensure you are signed up for VAT MTD with HMRC, if you aren't already. I assume that it means that the wrong scheme was in use.

In respect of the qualifications, I know little about the ICB (Institute of Certified Bookkeepers).
I'm ACCA, which along with ICEAW have the toughest regulation and qualification regime, covering all aspects of accounting, reporting and tax.

I hope this helps. Sorry it is so long

Rebecca

 

[MBE2017]

Make sure your bank and authorities etc are aware of your change in accountant, revoke all her rights to act on your behalf, at least that will stop most damage from a dishonest person.

Regarding fraud, waste of time unless you can show you have actually lost anything, even then any legal action would take a very long time. Stand your ground, hold onto the money until you get your paperwork and answers, get the old accountant to deal with your new one, and refuse to pay for any correspondence, unless of course you signed an agreement agreeing to such charges.

Most accountants will present you with a list of their fees before agreeing to work for you, so check your paperwork.

 

[DontAsk]

She is not our employee. ICB member only

She claims she's done 5 months books for us,

So is she a bookkeeper or an accountant?

I do my own bookkeeping and have never paid up-front for end-of-year accounts from the accountant.

 

[House of Silver]

Have you got agreed engagement terms and a price for the work? Is it based on a fixed price or an hourly bookkeeping fee?

If she has done the books for 5 months, then she may have already performed a lot of valuable work.

It is likely that she is using an online accounting system. So ask her if she is able to transfer the subscription for whatever bookkeeping system she is using to you when you leave her and preferably give you "read only" access in the interim.
These are your books and records. You need access to them both now and in the future. Your visibility may also help control the handover to the new accountants, as they can either use the same system or migrate any necessary balances/data.

If she is unhappy to do this before payment, then ask her to demonstrate through a screen sharing Zoom call that the work has been undertaken to give you more comfort that she has worked on your books.

Her loss of Accounts Manager may be due to Covid19's effect on her business and she sounds as if she is highly stressed. However, your loss of confidence in her means that your change of accountant is completely understandable.

As a point of note, I know many Eastern Europeans living here the UK who are excellent, so that point is totally irrelevant. I am also aware of many friends, from all over the world, who haven't been able to visit their families overseas for so long due to Covid19, that it is really causing them personal anguish. So please be kind when you speak with her. It is a really horrid time to be isolated from your loved ones.

You need to aim at a clearly defined handover, so that there is no duplication in work (and therefore costs) for your business.

Discuss this with your current bookkeeper, calmly, to agree to complete the books to the end of the month that she is working on, ensuring that there is a clear deadline for her completion of the work and accept her charges for the completing those bookkeeping services gracefully.
In view of your lack of confidence in her VAT work, ask her to exclude any VAT return work, but this may accelerate you deadline to ensure that you remain compliant.

Speak with your new accountants, so that you can plan with them on how the accounting system is transferred to their care. Ensure that you understand if they will be using a different system and what they will do which is different to your current bookkeeper.
It doesn't sound as if your current bookkeeper has been with you for very long, so also consider where your records previous to her appointment are stored.

Ensure you and your new accountant have clear expectations of how your relationship will work, both now and in the future.

Also you mention that she filed the "wrong VAT Return". This should be impossible under Making Tax Digital, although I'm not sure how it could be done under the old HMRC online system either. Ensure you are signed up for VAT MTD with HMRC, if you aren't already. I assume that it means that the wrong scheme was in use.

In respect of the qualifications, I know little about the ICB (Institute of Certified Bookkeepers).
I'm ACCA, which along with ICEAW have the toughest regulation and qualification regime, covering all aspects of accounting, reporting and tax.

I hope this helps. Sorry it is so long

Rebecca

Some great advise, thank you.

Let me make it clear, all we have from this accountant so far is one VAT submission (wrong amount) and 3 payrolls (two of which with mistakes). According to the contract (well defined in details) this work amounts to £75 fees. We have software SAGE subscription (£25 per months), however have never been issued any login details (so don't know if we are subscribed to anything at all). She says we need to pay this fee anyway as it is for adding new customers to the software. Then we have some 'analysis' in the bill for nearly £500 we never ordered, never been quoted and it's apparently for analysing previous accountants furlough claims which she thinks were incorrect. On top of that she claims she's done 5 months books which we have never seen and also she wants £60 from us for two short emails to our new accountant (regarding handover). She is extremely rude and insulting, uncooperative and at times made us wonder if she had mental problems. This is especially true after we challenged her regarding this virtual 'accounts manager' which we are pretty sure does not exist (at the same time we try to keep polite). Also, she ignored our new accountants emails for a week, knowing that payroll deadline was approaching and was really ransoming us to pay her bill to submit the payroll. We have suggested that we were prepared to pay for the books, but we need to see that they are up to standard. However she wants the payment first and for the whole amount with the extras mentioned above.

The thing that freaked us out most was this our imaginary 'accounts manager'. What was the purpose of inventing one?

 

[WaveJumper]

I can appreciate the current situation and your need to get it sorted but here we are five months into the contract and as you said no login details to a software system you are paying for. was this not a big red flag four months and 3 weeks ago I would have found someone new then.

Personally I am at a loss as to why this situation has gone on for so long

 

[House of Silver]

I can appreciate the current situation and your need to get it sorted but here we are five months into the contract and as you said no login details to a software system you are paying for. was this not a big red flag four months and 3 weeks ago I would have found someone new then.

Personally I am at a loss as to why this situation has gone on for so long

No, it's under 3 months. Red flag was soon after we engaged, but thought since it's years end to finish with her. However it was not possible.

 

[KAC]

We got new accountant already. again, she issued professional clearness letter to new accountant. Then she emailed them again two days later saying that she's not issuing one!
We can't believe this is happening.

Is your new accountant professionally qualified as mentioned by @Spur Support Services. ICB members don't necessarily need to have passed exams as I believe they can become members purely through experience. and they are primarily only bookkeepers and not qualified accountants.

Your new accountant should be able to hold your hand through your problems. They will be able to proceed even if the previous accountant fails to provide information.

ACCA say for instance "ACCA’s Code of Ethics and Conduct states: ‘The prospective accountant shall write to the existing accountant requesting all the information which ought to be made available to enable the prospective accountant to decide whether or not to accept the appointment.’ (Any information provided by the existing accountant must be provided honestly and unambiguously.) If the existing accountant does not reply to this request for information, or fails to supply a satisfactory reply, the prospective accountant should send a further letter by recorded delivery service. This letter should state that, unless a reply is received within a stated period, the prospective accountant will assume that there are no matters of which they should be aware and, at the end of the stated period, will proceed to accept the appointment.!