Asking the previous accountant for clearance
How a firm contacts a prospective client's previous accountant or auditor before accepting: permission, questions, silence and filing the replies.
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
A prospective client says their previous accountant "just stopped responding". Sometimes that is true. Sometimes the previous accountant resigned because the director asked for something improper, or because invoices went unpaid for a year, or because the statements were about to be qualified. The new firm will only find out which if it asks, and it should ask before it accepts, not after it has signed the engagement letter and started on the opening balances.
That inquiry is usually called a professional clearance letter. It is a short exchange between professionals, and it protects the incoming firm, the outgoing firm and, in the end, the client. This article covers how to run it well.
Why the professional code expects contact
The International Code of Ethics for Professional Accountants, issued by IESBA, deals with changes in professional appointments. A firm asked to replace an existing accountant must decide whether there is any reason, professional or otherwise, not to accept, and communicating with the existing accountant is the most direct way to find out. The existing accountant, for their part, is bound by confidentiality and generally needs the client's permission before discussing the client's affairs. IESBA's page on the International Code of Ethics for Professional Accountants introduces the Code, including its five fundamental principles and the conceptual framework for identifying and addressing threats to them.
Professional bodies across the region build their own codes on these principles, so check the version that binds your firm and your engagement type, particularly for audits, where the expectations are strictest.
The client's permission first
Start with the prospect. Ask for written permission to contact the previous accountant or auditor, and for an instruction to that firm to answer your questions fully. Put both in a short letter the client signs.
How the prospect reacts is itself evidence. Most sign without hesitation. A prospect who refuses, delays or wants to "explain the background first" has told you something important, and an unexplained refusal is a strong reason not to proceed.
Achekam can carry the permission letter. Staff prepare a document for e-signature, add the signer, and the client signs from an e-mailed link without an Achekam account. The signed copy then exists with a record of when it was signed, which is useful if the previous firm asks to see the authority.
What to ask
Keep the letter to the previous firm short and specific. Ask:
- Whether there are any professional reasons why your firm should not accept the appointment.
- Whether there were disagreements with management about accounting treatment, the opinion or the scope of the work.
- Whether they have any concerns about the integrity of the owners or managers.
- Whether any fees are outstanding.
- For an audit, whether they will give access to their working papers for the prior year, which helps with opening balances.
Add practical handover questions in a separate paragraph, so the professional questions are not lost among them: the location of the client's accounting records, the status of tax returns and payroll submissions, and any deadlines falling due soon.
Outstanding fees are worth knowing about, but in most cases they are a matter between the client and the previous firm rather than a reason on their own to refuse the work. Disagreements and integrity concerns are different, and should go to the partner who will approve acceptance.
To send the client's signed authority with your letter, staff can share the document from the vault with the previous accountant by an e-mailed link. The link can block downloading, can require a code and can be revoked, and every view and download is recorded. Share links last 7 days by default, which suits a request you expect answered within a week or so.
When there is no reply
Silence is common and not always sinister; the previous accountant may be busy, retired or simply slow. Send a reminder after a reasonable period, by a second channel if possible, and record each attempt.
If there is still no answer, the partner decides whether the firm has enough information to accept. Other inquiries can fill some of the gap: conversations with the client's bankers or lawyers, public records and searches, and the client's own explanation. Document what was done and why the partner concluded the risk was acceptable, or not.
Achekam has no managed handover pack between an outgoing and an incoming firm. When a business that keeps its books on Achekam changes accountant, it ends one appointment and invites the new firm. The clearance exchange therefore sits outside the software's workflow, as correspondence the firm keeps. What happens in the first year once the appointment is accepted is covered in the first year after another accountant.
Filing the correspondence with the acceptance
The clearance letter is part of the acceptance evidence, so it belongs with the acceptance decision. In Achekam, the firm records a client acceptance review under QUALITY & GOVERNANCE > Client Acceptance & Continuance, after a conflict check against its own clients and contacts, and only a signed-in partner can approve it. Customer due diligence in that review is a tick-box confirmation by the preparer, so the documents behind it need to be filed separately.
The Document Centre keeps a folder for each lead and each client, with versions, tags, and archive and restore with a reason. File the client's signed authority, your letter, every reminder and the reply in the prospect's folder before the partner approves acceptance. The acceptance review itself is described in client acceptance and the conflict check.
A worked example
A manufacturing company asks the firm to take over its audit. The manager has the managing director e-sign a permission letter and shares it, with the clearance letter, with the previous auditor by a revocable link. The previous auditor replies that there were no professional reasons to decline, but that a disagreement over inventory valuation led to a qualified opinion last year. The manager files the reply in the lead's folder, and the partner approves acceptance knowing that opening inventory will need extra work and that the same disagreement may return.
Make it routine
Add the clearance letter to your acceptance checklist as a step that cannot be skipped for any engagement where another accountant acted before. Keep a standard letter, a standard permission form and a standard reminder, and the step takes minutes rather than days.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
