CPABC in Focus November/December 2016 | Page 28

When Clients Feud Bplanet/iStock/Thinkstock 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.