5 most common fee disputes ‘could trigger refund action’

Profession

10 October 2023

Philip King

5 most common fee disputes could trigger refund action

News

One of the proposed changes to CA ANZ conduct rules is open to abuse, webinar hears.

The five most common fee disputes could escalate to become conduct issues for public practice accountants if members vote through proposed changes to CA ANZ rules, webinar attendees heard yesterday.

The webinar was hastily organised by software outfit ChangeGPS over concerns that a rule change currently before CA ANZ members could empower disgruntled clients to “reverse engineer” their story in an attempt to recover fees.

ChangeGPS CEO David Boyar said resolution 6, which would allow the CA ANZ Disciplinary Tribunal to order the refund or waiver of fees paid by a complainant, could be exploited by bad actors.

“I think that this is open for abuse by people who want to cause harm and create benefit for themselves,” he said. “My message is to everyone listening, tighten up the way your practice is run around during engagements to limit the chances of a client getting put offside.”

Webinar guest Paul Meissner, the CEO of 5Waysgroup, said safeguards around the rule offered little reassurance.

“There is not a fee dispute that I can think of really that doesn't have or that can't have an ethical angle,” he said. “You are at the mercy of CA saying, ‘Oh, well, you think it's a fee dispute, but we're going to find this ethical angle.’ ”

He said small practice accountants could find themselves either accepting the decision of CA’s Professional Conduct Committee or facing its Disciplinary Tribunal.

“I think this increases the numbers that are open to these fee disputes, not just the 10 per cent or 11 per cent that go to the tribunal, and also it's backing that Professional Conduct being the sole judge … they potentially have the ability to wield it as a stick without it being heard at the disciplinary tribunal.”

ChangeGPS founder Tim Munro said there might be a temptation for CA ANZ to prove it was doing its job by applying the rule against those least able to fight back.

It also opened up the possibility of no-fee legal firms touting for business on social media.

“Lawyers will be starting a service based on this – 100 per cent. If I'm running one of those no free legal firms I'm gonna be advertising to right away. I'm gonna be all the Facebook groups saying, ‘Hey, has your accountant done the wrong thing? I’m going to help you get your fees back and we'll charge you 20 per cent.”

The webinar outlined the five most common fee disputes as:

Work that was not scoped.
The engagement letter is a general “preparation and lodgement of tax returns for entity …”
Clients’ circumstances change, they fail to tell the accountant and there’s no change of scope.
The client did not get a big enough refund.
The client paid for a service that was not delivered.

Mr Boyar said CA ANZ should have bylaws that more accurately reflected the differences between the Big 4 firms and those working in small-medium practices.

He said the bylaws were “designed to create this opening” but urged all CA ANZ members to vote.

“You should vote – you get the board and strategy you deserve.”

“It's very unfortunate and sloppy of CA that they've come up with a bylaw that wipes up all their members in one fell swoop.”

About the author

Philip King

Philip King is editor of Accounting Times, Accountants Daily and SMSF Adviser, the leading sources of news, insight, and educational content for professionals in the accounting and SMSF sectors. Philip joined the titles in March 2022 and brings extensive experience from a variety of roles at The Australian national broadsheet daily, most recently as motoring editor. His background also takes in spells on diverse consumer and trade magazines. You can email Philip on: [email protected]