Accountancy negligence

[Disillusioned]

We have been the subject of accountancy negligence and has anybody else faced this issue and how did they deal with it?

 

[Lisa Thomas]

What type of negligence is it? What have you done so far about it?

 

[Disillusioned]

What type of negligence is it? What have you done so far about it?

Well I have had all my accounts redone. I started to write what they have done wrong and quicker to write what they have! Nothing.
They showed profits for all years three now losses, are suppliers payments all under what they should have been, inflated takings, VAT error not picked up by then in purchase day book.
That might be enough to start with.

 

[Disillusioned]

Well I have had all my accounts redone. I started to write what they have done wrong and quicker to write what they have! Nothing.
They showed profits for all years three now losses, are suppliers payments all under what they should have been, inflated takings, VAT error not picked up by then in purchase day book.
That might be enough to start with.

Sorry that should be our! I need to get a claim in for all the losses but keep getting conflicting areas of claim but I do have a rough idea.

 

[Mark T Jones]

Be clear, concise and relevant

Quantify everything - including consequential loss

Their defence is likely to revolve around

1. The nature / terms of your contract
2. Discussions held
3 information provided by you.

Be prepared - if you're lucky, they may roll over and pay you off, but don't rely on it

 

[Disillusioned]

Be clear, concise and relevant

Quantify everything - including consequential loss

Their defence is likely to revolve around

1. The nature / terms of your contract
2. Discussions held
3 information provided by you.

Be prepared - if you're lucky, they may roll over and pay you off, but don't rely on it

CIMA issued a severe reprimand against two years which they rectified when I found out what they had done or hadn’t. All years show the same patterns of mistake. They were sick of my emails asking questions and one of their replies to me is libelous. It’s disgraceful and the biggest mistake of my life changing accountant. My previous accountants were my parents and he saw my dad through a tax inspection which came out totally clean. They also set up all my ledgers at the very beginning. He retired and I was also caring for my mum and was tired. We wanted to go limited so my great idea an accredited accountant down the road. Every time raising going limited brushed aside so another mistake! I tried changing to quickbooks in 2018 but stopped because we are in the margin scheme. That was off my own back and I should have persevered. I can’t begin to explain the mess they have caused.

 

[Newchodge]

Is your accountant a member of an accountancy body?

 

[Disillusioned]

Yes and CIMA just gave a severe reprimand which they quickly accepted

 

[Newchodge]

Yes and CIMA just gave a severe reprimand which they quickly accepted

And has there been a breach since the reprimand?

 

[Mark T Jones]

Yes and CIMA just gave a severe reprimand which they quickly accepted

Circle back

Direct Loss
Consequential loss
Proof

Don't waste time trying to convince a forum, form a case

 

[Disillusioned]

And has there been a breach since the reprimand?

Breach was before. No idea as they disengaged their services a good eight months after I found out first initial problem. I don’t know how many times they told me I wasn’t an accountant! CAB said as I had an interest in the firm in that they owed me money, I must not disengage them !

And has there been a breach since the reprimand?

Circle back

Direct Loss
Consequential loss
Proof

Don't waste time trying to convince a forum, form a case

I have enough for a case. I just don’t like the way small businesses are treated. CIMA sat on it because we are a small business. It’s is very unprofessional and it is a growing area of negligence. It needs highlighting.

 

[Paul Kelly ICHYB]

As a director, you are responsible for the accuracy of your accounts. Whilst you seem to have now picked things up, which is great, why didn't you before?

Businesses should at least understand if they are making a profit or a loss at thee end of the year.

 

[Disillusioned]

As a director, you are responsible for the accuracy of your accounts. Whilst you seem to have now picked things up, which is great, why didn't you before?

Businesses should at least understand if they are making a profit or a loss at thee end of the year.

The first years profit they showed was in line with the previous years profit by our former accountants with a similar turnover and the following year was out but not to the great extent of the third year which was slightly masked by two events, then Covid. They started to change the way they calculated our suppliers payments. You are meant to be able to trust professional accountants to at least open your ledgers and not write to you stating they did your incoming reconciliation between your bank statement and terminal provider. The very last year they did the accounts they wrote stating they would use our sales figures for the very first time and guess what all wrong again. All information was listed and I certainly questioned the amounts from 2020 onwards because of the tax bills to be told they were correct.
Why employ fully qualified accountants if their practice is totally incompetent. Maybe the law needs changing around them. Our previous accountants set up all our ledgers, which I explained to them at the initial meeting, and there were no problems with them at all. They owe any client a duty of care and all the information notes etc they required to do accurate year end were provided. They didn’t check the VAT in my purchase day book either and I have letters which confirm they certainly didn’t understand this either. Yes we are in a mess but they are still trading. It’s very concerning - who else is there? Ah but it’s a professional so us laymen who pay their fees should know better! I feel scammed as they said they could handle our accounts when obviously they were not as knowledgeable or capable. A book keeper would have done a better job.

 

[Gecko001]

Have you hired the services of a forensic accountant? If this comes to seeking damages for negligence, the accountant's insurer will almost certainly appoint one to act on behalf of the accountant you are accusing of being negligent.

 

[Paul Kelly ICHYB]

Why employ fully qualified accountants if their practice is totally incompetent.

You are totally correct, but, alas, you only find out too late!

Maybe you should run your own software and use a bookkeeper, allowing you to see the status of the business when you require. You then get the accountant to sign off on things. This puts another level of screutiny in the mix.

 

[Disillusioned]

The sad thing is I tried changing to QuickBooks in 2018 off my own back but dumped it a

You are totally correct, but, alas, you only find out too late!

Maybe you should run your own software and use a bookkeeper, allowing you to see the status of the business when you require. You then get the accountant to sign off on things. This puts another level of screutiny in the mi

Have you hired the services of a forensic accountant? If this comes to seeking damages for negligence, the accountant's insurer will almost certainly appoint one to act on behalf of the accountant you are accusing of being negligent.

No but we are waiting on a couple of outcomes at the moment. The accounts have been meticulously redone and it showed how everything was in my ledgers. I have my ledgers on my phone and my new accountant would often email with a question. One night she emailed about my exports and breaking them all down and I could easily do it from my ledgers. There was one question which stumped me for two days from 8 years ago as could not find the check stubs but I found it in the purchase day book and there was a note stating two invoices had been paid together and the amount! My mother who was a bookkeeper taught me basic ledger work at 14 and so had often done the odd bit in my jobs. A block of managed flats and a head office project for a PLC. My ledgers were detailed but they were too incompetent to even look at them. One lot of Covid grants were totally missed off by these accountants although I cut and pasted the figures in an email and pointed to where they would find all the information in the ledgers. Guess what they only took the two numbers they originally asked about and ignored the other three! They read nothing written to them in detail either. Maybe my old accountant looked after me too well but he retired from the business and they were quite a distance away, I was looking after my elderly mother and working. 6.5 days a week I wanted a local accredited accountant. I checked some of the first two years numbers but didn’t think about taking the VAT number off the sales figures which was my mistake. However, they claim they were not responsible for my VAT reconciliation and if they had told me that at the beginning I would never had appointed them. It’s all PR rubbish about appointing an accredited accountant and I should know as I worked many years for one of the country’s leading press publicists.

 

[Disillusioned]

You are totally correct, but, alas, you only find out too late!

Maybe you should run your own software and use a bookkeeper, allowing you to see the status of the business when you require. You then get the accountant to sign off on things. This puts another level of screutiny in the mix.

My first accountants were very good and I did my homework about accredited accountants and I explained everything to them. There were even information in emails they ignored so don’t try and put the blame on me as I am not an accountant which they have clearly stated so many times in their contradictory and bullying replies. CIMA would not have stated what they did if it wasn’t true. CIMA said considered the matter to be too serious for there to be no order. That’s ok it’s ALL my fault and we pay the price!

 

[Newchodge]

My first accountants were very good and I did my homework about accredited accountants and I explained everything to them. There were even information in emails they ignored so don’t try and put the blame on me as I am not an accountant which they have clearly stated so many times in their contradictory and bullying replies. CIMA would not have stated what they did if it wasn’t true. CIMA said considered the matter to be too serious for there to be no order. That’s ok it’s ALL my fault and we pay the price!

What happened was a disgrace. I am not wuite sure what you are trying to achieve now?

 

[Disillusioned]

What happened was a disgrace. I am not wuite sure what you are trying to achieve now?

Take them for breach and negligence but I think it needs highlighting for all small businesses. We get busy running our companies and expect an accredited professional to do a correct job. Have you seen the increase of claims in this area? It just shows there is no regulation and they need to be held to stricter regulation and to look thoroughly at what is provided to them. If they did not like my spreadsheets and found it too complicated, which it wasn’t, tell me to change or end the contract but it’s all down to the normal situation in this country greed. I did keep an eye on takings but monthly. I know our bad months and good months. I have evidence how they produced the accounts and how no reconciliation to my ledgers was ever performed. I listed all incoming monies and the amounts against invoices each year - all ignored. At times after it happened I felt like I should have sat with them holding their hands.

 

[Paul Kelly ICHYB]

@Disillusioned Can you please break your posts down into paragraphs?

Seeing one big paragraph puts some people off reading & participating in topics.

 

[DontAsk]

The answer (I've said this before) is understanding all aspects of your business.

I do all my own bookkeeping and before I send the data to the accountant for checking/submission, I know to within a few £ what the results will be. The only discrepancy is what they decide to charge this year.

In fact, it's so simple I could probably ditch the accountant altogether.

 

[DontAsk]

Another point, if you and your accountant are using the same software there should be NO issues, unless your input to the software is faulty.

 

[Disillusioned]

Noted

The answer (I've said this before) is understanding all aspects of your business.

I do all my own bookkeeping and before I send the data to the accountant for checking/submission, I know to within a few £ what the results will be. The only discrepancy is what they decide to charge this year.

In fact, it's so simple I could probably ditch the accountant altogether.

mine are not quite that simple. Obviously it’s all my own mistake.

 

[Disillusioned]

Noted

mine are not quite that simple. Obviously it’s all my own mistake.

My old accountants did them correctly

 

[Disillusioned]

Another point, if you and your accountant are using the same software there should be NO issues, unless your input to the software is faulty.

My old accountant set them up in Excel spreadsheets as I explains to them at the beginning. Never raised any concerns whatsoever.

 

[Frank the Insurance guy]

Take them for breach and negligence

Sorry to hear of what has happened.

You need to be able to figure out what your "financial loss" is and then make a formal claim to them for these losses.

In order to assess your Financial loss, you (or new accountant) will need to look at what the true position was- ie. had the accountant done everything properly and correctly, what would the result have been and how does this compare to the incorrect results?

You will need to prove the financial loss, incorrect accounts vs correct accounts etc (your new accountant should be able to help with this)

Use this as a starting point - make a formal claim, providing proof of your calculations and losses.

Your old Accountant are likely to then get their Insurers involved who will appoint legal defence to argue the case &/or discuss settlement.

 

[Newchodge]

Sorry to hear of what has happened.

You need to be able to figure out what your "financial loss" is and then make a formal claim to them for these losses.

In order to assess your Financial loss, you (or new accountant) will need to look at what the true position was- ie. had the accountant done everything properly and correctly, what would the result have been and how does this compare to the incorrect results?

You will need to prove the financial loss, incorrect accounts vs correct accounts etc (your new accountant should be able to help with this)

Use this as a starting point - make a formal claim, providing proof of your calculations and losses.

Your old Accountant are likely to then get their Insurers involved who will appoint legal defence to argue the case &/or discuss settlement.

And you need to do it fairly quickly. There is a 6 year time limit on lodging a claim.

 

[Disillusioned]

I have LEI but they are taking their time. Last time they said no purely down to the fact my cover wasn’t in place when I first appointed them. It’s different now as 2019 was the year that they received a reprimand against and we renewed our lease against their profit figures instead of closing down.
I feel it’s worse than being scammed.

 

[Disillusioned]

And you need to do it fairly quickly. There is a 6 year time limit on lodging a claim.

Three years from when it was discovered as well - or so that is what I understand.

 

[Newchodge]

Three years from when it was discovered as well - or so that is what I understand.

Primary Limitation Period​

The primary limitation period for professional negligence claims typically spans six years from the occurrence of the alleged negligence. Acting promptly within this timeframe is crucial to preserve the integrity of evidence and enhance the likelihood of a successful claim.

Secondary Limitation Period​

In some instances, individuals may become aware of professional negligence beyond the initial six-year period. In such cases, a secondary limitation period may apply, providing an additional three years from the date of discovery to initiate a claim.

Longstop Limitation Period​

While the secondary limitation period extends the window for filing a claim, it is important to recognise the ultimate cut-off point known as the ‘longstop’ limitation period. This period, set at 15 years from the date of negligence, represents the final opportunity to bring forth a claim.

What’s the Limitation Period in UK Professional Negligence Cases?

Limitation Period / Professional Negligence Lawyers / Expert Professional Negligence Advice / Professional Negligence London / Professional Negligence Claim

professionalnegligenceclaimsolicitors.co.uk

Be careful of the 3 year secondary period. It runs from when you knew, or should have known about the negligence. When did you report them to CIMA?

 

[Disillusioned]

Primary Limitation Period​

The primary limitation period for professional negligence claims typically spans six years from the occurrence of the alleged negligence. Acting promptly within this timeframe is crucial to preserve the integrity of evidence and enhance the likelihood of a successful claim.

Secondary Limitation Period​

In some instances, individuals may become aware of professional negligence beyond the initial six-year period. In such cases, a secondary limitation period may apply, providing an additional three years from the date of discovery to initiate a claim.

Longstop Limitation Period​

While the secondary limitation period extends the window for filing a claim, it is important to recognise the ultimate cut-off point known as the ‘longstop’ limitation period. This period, set at 15 years from the date of negligence, represents the final opportunity to bring forth a claim.

What’s the Limitation Period in UK Professional Negligence Cases?

Limitation Period / Professional Negligence Lawyers / Expert Professional Negligence Advice / Professional Negligence London / Professional Negligence Claim

professionalnegligenceclaimsolicitors.co.uk

Be careful of the 3 year secondary period. It runs from when you knew, or should have known about the negligence. When did you report them to CIMA?

I found out September 2023 but looked again end of January 2024 and their errors were much worse than first thought. 21 March 2024 reported to
CIMA who only looked at the rectified matter in September 2023 for their severe reprimand. CIMA had the new headline figures showing the repetitive mistakes across all

 

[Disillusioned]

Years but decided to ignore my new accountants findings. CIMA claim it’s like a judicial review now it has happened I really beg to differ as I can prove with evidence relating to other matters.