An ethical letter to a previous accountant, more precisely called a professional enquiry, is a short written request from the incoming firm to the outgoing one asking whether any professional or ethical reason exists that should stop the new firm from accepting the client. Keep it to one page. Send it only after you have the client’s written consent. Ask the one question that matters, identify the client and the work clearly, and give the predecessor an easy way to reply.
The letter exists because clients sometimes change accountants to escape scrutiny, and a normal client interview will not surface a fee dispute, a disagreement over accounting treatment, or a concern about management integrity. The enquiry gives the predecessor a confidential channel to flag those things before you sign an engagement letter.
What the Letter Is Not
The previous accountant has no authority to grant or withhold “clearance” to act. The label is common but slightly misleading. The predecessor can raise concerns; the decision to accept or decline always belongs to you.1ICAEW. Change of Professional Appointment – Incoming Accountant The letter is also not the place to request prior returns, working papers, or file transfers. Those requests come later, after you accept the engagement.2CPA Australia. Why Ethical Letters Are Vital in New Client Relationships
Get Written Consent Before You Send Anything
No communication between the two firms can happen without the client’s permission. Both you (to send the enquiry) and the outgoing accountant (to respond) need the client’s written authorization. Without it, the predecessor is bound by confidentiality and cannot share anything about past work.1ICAEW. Change of Professional Appointment – Incoming Accountant
Two things need to happen early. Tell the prospective client you have a professional duty to contact their current accountant, and get their written authority to do so. Then ask the client to notify the existing accountant directly and authorize that firm to cooperate with your enquiry. If the client refuses, weigh that carefully before accepting the engagement.
For U.S. practitioners, IRC Section 7216 makes this more than a formality. A tax preparer who discloses information furnished in connection with the preparation of a tax return, without proper authorization, commits a misdemeanor punishable by a fine of up to $1,000 (up to $100,000 in certain cases), imprisonment for up to one year, or both.3Office of the Law Revision Counsel. 26 USC 7216 – Disclosure or Use of Information by Preparers of Returns The consent form carries real legal weight on both sides of the letter.
What the Consent Must Contain
The IRS requires every written consent for disclosure of tax return information to include the preparer’s name, the taxpayer’s name, a description of the information being disclosed, who will receive it, and the specific purpose of the disclosure. If the consent does not specify an expiration date, it lapses one year after signing. A preparer cannot condition their services on the client agreeing to the disclosure.4Internal Revenue Service. Revenue Procedure 2013-14
What to Include in the Letter
The letter should be short and focused. Practitioners sometimes pad it out like a general introduction; the professional bodies are clear that it should stick to the core enquiry. Include:
- The client’s full legal name, relevant tax identification numbers, and the fiscal years in question.
- A brief description of the services you have been asked to provide, whether tax preparation, audit, bookkeeping, or advisory work.
- An explicit request asking whether the predecessor is aware of any professional or ethical reason why you should not accept the engagement.2CPA Australia. Why Ethical Letters Are Vital in New Client Relationships
- A statement that the client has authorized the communication, with a copy of the signed consent attached.
- Your firm’s address, phone number, and email so the predecessor can respond easily.
For audits of public companies, PCAOB Auditing Standard 2610 pushes the enquiry further. The successor auditor is expected to ask about management integrity, disagreements over accounting principles, any communications about fraud or illegal acts, and the predecessor’s understanding of why the client is changing auditors. The standard is direct: an auditor should not accept the engagement until these communications have been evaluated.5Public Company Accounting Oversight Board. AS 2610 – Initial Audits – Communications Between Predecessor and Successor Auditors If your engagement is a PCAOB audit, include those specific questions in the letter.
Sending It and Proving Delivery
Send the letter through a method that creates a verifiable record. Certified mail with return receipt is the traditional route. Secure digital portals and encrypted email work too, provided you can prove when the message was sent and received. Keep a copy of everything, including the signed consent you attached.
How Long to Wait
There is no universal deadline for the predecessor to reply. The AICPA Code requires the predecessor to respond “promptly” and “fully, on the basis of known facts.”6American Institute of Certified Public Accountants. AICPA Code of Professional Conduct The ICAEW framework suggests that if you have not heard back within a reasonable period, typically 14 to 30 days depending on the circumstances, you should send a follow-up letter by recorded delivery stating your intention to accept the engagement if no reply arrives within a further specified period.1ICAEW. Change of Professional Appointment – Incoming Accountant
File all correspondence, proof of delivery, and any follow-up attempts in the client’s permanent engagement record.
Reading What Comes Back
A clean reply stating no professional reasons exist to decline is the best outcome. Even then, it only means the predecessor is not aware of issues, not that none exist.
If the predecessor raises concerns, take them seriously. Common disclosures include outstanding fee disputes, disagreements over accounting treatments, questions about management honesty, and awareness of potential fraud. None of these automatically disqualifies the client, but each one requires you to decide whether the risk sits within your firm’s acceptable limits. A fee dispute might just reflect a personality clash. A management integrity concern paired with a disagreement over revenue recognition is a different situation.
If the response is limited, citing something like pending litigation or disciplinary proceedings, PCAOB AS 2610 requires the successor to consider the implications of that limitation when deciding whether to accept the engagement.5Public Company Accounting Oversight Board. AS 2610 – Initial Audits – Communications Between Predecessor and Successor Auditors A vague or evasive answer deserves at least as much weight as an explicit warning.
If the Predecessor Never Replies
Silence is not uncommon, and it does not automatically prevent you from accepting the client. It should heighten your caution. Document every attempt: the initial letter, proof of delivery, the follow-up letters, and the dates. That paper trail shows you fulfilled your professional obligation even if the predecessor chose not to cooperate.
Under PCAOB AS 2610, if a prospective client refuses to let the predecessor respond, the successor should ask why and weigh those reasons carefully before proceeding.5Public Company Accounting Oversight Board. AS 2610 – Initial Audits – Communications Between Predecessor and Successor Auditors The same logic applies when the client consents but the predecessor simply ignores the letter. You can proceed, but consider extra risk-assessment work in the early stages: closer review of opening balances, prior-year returns, and client acceptance documentation.
Fee Disputes and Client Records
Fee disputes come up often in the predecessor’s response, and they raise a separate question about what records the outgoing firm must hand back to the client.
Under Circular 230, Section 10.28, a practitioner must promptly return any client records necessary for the client to comply with federal tax obligations upon request. A fee dispute does not relieve this obligation. If state law permits retaining records during a fee dispute, the practitioner must still return documents that need to be attached to the taxpayer’s return. For any other records retained under state law, the practitioner must provide reasonable access for the client to review and copy them.7eCFR. 31 CFR 10.28 – Return of Client’s Records
The AICPA Code sorts records into four categories that determine what must be turned over. Client-provided records (documents the client originally gave the firm, such as bank statements or receipts) must be returned and cannot be withheld for nonpayment. Member-prepared records (items the firm created that are not in the client’s own books, such as adjusting journal entries) should generally be provided, though they can be withheld if fees are owed for the specific work product they relate to. Work products, meaning the deliverables defined in the engagement terms, can also be withheld for unpaid fees. Working papers, such as audit programs or analytical review schedules, belong to the firm and generally do not need to be provided to the client at all.6American Institute of Certified Public Accountants. AICPA Code of Professional Conduct
The predecessor is entitled to raise outstanding fees in their reply to your enquiry, even though that alone is not a basis for refusing to respond.1ICAEW. Change of Professional Appointment – Incoming Accountant If a fee dispute surfaces, discuss it frankly with the prospective client before you sign the engagement letter. A client who left their last accountant owing money may do the same to you.