Providing access to client files: Obligation or professional courtesy?
It’s noon on Friday, and a CPA learns she has a new audit client. What a great way to end the week!
After completing the client acceptance process, she contacts the predecessor CPA to ask if there are any circumstances she should consider before accepting the audit engagement. When she calls to agree on when she can access last year’s audit file, she’s surprised to hear the predecessor CPA refuse to give her access to the file.
Whether you’re the predecessor or successor CPA in such a situation, here’s what you need to know about access to a CPA’s working papers (e.g. audit file):
- As a CPA, you must respect the right of your clients, or their authorized representatives, to take cognizance and obtain copy of documents concerning your clients in any file developed in connection with them in the performance of a contract, even if the fees are unpaid.1
- In addition to their financial statements and income tax returns, you must give your clients the documents that concern them, including the following:
- All the original documents they have given you (e.g. leases, banking agreements, invoices);
- All documents you have created in support of the financial statements (e.g. journal entries, consolidation files, support for note disclosures, leadsheets, deferred tax calculations) and any other similar documents not listed here.
- According to assurance standards (audits and reviews), CPAs must perform work on opening balances and may, for example, obtain sufficient appropriate evidence by reviewing the predecessor’s working papers.2
- At this time, the Code of ethics does not have a specific obligation requiring CPAs to give successor CPAs access to their working papers, except for the documents concerning clients, as mentioned above. However, the Order is currently updating the Code of ethics, which will eventually have more detailed provisions on collaborating with successor CPAs.
- Remember, CPAs are bound by professional secrecy. You must therefore obtain your clients’ authorization, preferably in writing, before you hand over documents that concern them or provide access to your working papers. Sample letters for audit, review and compilation engagements, including a client authorization letter and a letter for the successor CPA to sign, are available on the Order’s website.
So, is providing access to client files an obligation or professional courtesy? Well, giving a colleague access to some or all of your working papers not only comes down to professional courtesy, but it also shows that, even though you’ve lost a client, you continue to act in that client’s best interest. After all, you’re a professional!
1 Code of ethics of chartered professional accountants, sections 46 and 46.1
2 CAS 510, paragraph 6 and CSRE 2400, paragraph 55