When Clients Feud
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From CPABC's Ethics Department
Well, I don't know why I came here tonight
I got the feeling that something ain't right
I'm so scared in case I fall off my chair,
And I'm wondering how I'll get down those stairs
Clowns to the left of me, jokers to the right,
Here I am, stuck in the middle with you.
– Stealers Wheel
W
hen Gerry Rafferty co-wrote and sang these words from Stealers Wheel’s hit
song “Stuck in the Middle with You” in 1972, it’s fair to assume that he wasn’t
referring to client relationships. But here at CPABC, we’ve witnessed a number
of circumstances in which professionals have found themselves stuck in the middle of emotional and bitter disputes between business partners or family members who’ve devolved into
warring parties as a result of changing circumstances.
The two fictionalized examples below are loosely based on actual complaints made to
CPABC’s Investigation Committee and to our legacy bodies. Names and circumstances have
been changed to preserve anonymity.
28 CPABC in Focus • Nov/Dec 2016
Typical “in-the-middle” complaints
The most common in-the-middle situations
involve family disputes. Where once there
was togetherness, now there is discord. Here
are two examples illustrating the types of
challenges involved in these situations:
1. A CPA practitioner prepared the
annual tax returns for a client. After
this client married, the CPA
practitioner began preparing the
annual tax returns for both spouses. In
time, the couple became equal
shareholders of a company for which
the CPA was engaged to provide
accounting services.
Unfortunately, the marriage broke
down and acrimony ensued. Naturally,
the shareholder relationship also
deteriorated. The CPA decided to
continue performing both the
corporate and personal tax
engagements, but failed to co-operate
with numerous requests for financial
information from one of the
shareholders, even though the party
had the right to this information.
Eventually, the “neglected” shareholder
complained to CPABC that the CPA
had improperly withheld financial
information and, in so doing, had acted
unprofessionally.
2. A CPA practitioner provided tax and
accounting services to a wealthy family,
including its members who resided
overseas. A dispute ultimately arose
among the family as to whether the
CPA had accurately allocated and
reported declared dividends. The
family members living overseas
complained to CPABC that the CPA
was not treating each person equitably
and professionally, and favoured the
family member who paid the CPA’s fees.