3 Oct 2019 05:33pm

Practice Q&A: parting with clients and overrides

This month, advice on how to exit from a client relationship professionally, and the current standing of true and fair overrides when examining charity accounts. Plus our monthly excel tip.

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Caption: Illustration by Yukai Du

Q: The filing deadline is imminent and my client has not provided information I need. Can I resign?

You have the right to resign from a client and in these circumstances it may seem the easiest thing to do. However, there are professional and ethical considerations, in particular the requirement to provide a competent professional service and not prejudice the clients’ interests. To protect yourself against a potential complaint that you have acted inappropriately, it is wise to document the circumstances and to note any evidence to support your decision.

That evidence might include: 1. An initial client acceptance clearly setting out the expectations of both parties regarding timeframes and specific deadlines by which information needs to be provided. This should explain the consequences of not meeting these deadlines including additional fees and the fines/penalties associated with late submission, as well as the possibility of your resignation and the circumstances under which this would take place. 2. Further reminders prior to each deadline. 3. Chasers following each deadline reminding the client that the timeframes agreed previously are now jeopardised and that the required information should be sent as soon as possible. 4. Notice of resignation, referencing the circumstances described in 1.

If you consider resignation appropriate, ensure the client fully understands the position, including the impending deadlines and the implications of failing to meet them. In relation to tax work you also need to notify HMRC that you are no longer acting. Further guidance for members is available in the helpsheet Resignation close to tax filing deadline (available at ethics-helpsheets/resigning-close-to-tax-filingdeadline) and from the ICAEW Ethics Advisory Service on +44 (0)1908 248 250.

David Stevens, professional consultant, ICAEW Advisory Services

Do I still need a true and fair override to the 2008 regulations in charity accounts?

This issue affects only English and Welsh charities which are not companies (eg unincorporated charities and Charitable Incorporated Organisations (CIOs)) where they prepare their accounts on an accruals basis. The Charity (Accounts and Reports) Regulations 2008 (SI 2008/629) still reference the 2005 SORP and have not yet been updated to reflect the change to the Charities SORP (FRS 102). Therefore, affected charities are required to include a true and fair override in both the trustees’ report and the accounts.

If the charity is subject to an independent examination, the examiner should also make reference to the true and fair override in their report. If the charity is subject to an audit however, where the accounts include the appropriate true and fair override statement, there is no requirement to amend the audit report. Ordinarily, where an auditor or independent examiner modifies their opinion or includes an emphasis of matter, this would constitute a matter of material significance reportable to the Charity Commission. It has, however, stated that it does not consider the true and fair override to the 2008 regulations to be a matter of material significance and there is therefore no need to make a report where this is the only identified issue.

Chris Turner, professional consultant, ICAEW Advisory Services

Monthly excel tip: accept no substitute

Excel works great with numbers – but did you know it also has a range of excellent text altering functions? For example, chop down text to just the code or detail you want using LEFT, RIGHT, and MID, perhaps in combination with a FIND to find the label you want. So if your account code appears as “ACC005” somewhere in the middle of a string, you’d use =MID(A1, FIND(“ACC”, A1)+3, 3). FIND is case-sensitive so other uses of the word “account” won’t throw it off. Or make a formula-style, repeatable find/replace with SUBSTITUTE – such as =SUBSTITUTE(A1, “July”, “August”) to change a month name.

Another useful trick is the LEN function, which tells you the length (in characters) of a piece of text. LEN and SUBSTITUTE together let us detect how many times a certain character appears in text. For example, to check the word count of a cell, we can compare the length with and without spaces with =LEN(A1) - LEN(SUBSTITUTE(A1, “ “, “”))+1 Just one final note – any time you want to put text into one of these formulas, don’t forget to use quotation marks – and any time you expect to get a number out of one, you’ll need to multiply the result by 1 to get Excel to realise that there’s a number there. Find more Excel top tips and training with the Excel Community:

David Lyford-Smith, technical manager, Tech and the Profession, ICAEW Tech Faculty