Professional clearance letter template
A professional clearance letter is how an accountant asks the client's previous accountant whether there is any professional reason not to accept the appointment, and how the previous accountant replies. It is written for every client taken over, with the client's permission. The same document covers the request from the incoming accountant and the reply from the outgoing one.
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What changes each time
14 values. Everything else is your wording, kept exactly.
The firms
- Incoming firm's name
- Incoming firm's address and email
- Outgoing accountant's name
- Outgoing firm's name
- Outgoing firm's address
The client
- Client's full name or company name
- Services
- Date or period appointment starts
The reply
- Brief factual details, with the client's consent
- Items enclosed or sent separately
- Amount of outstanding fees
Sign-off
- Name
- Job title
- Date
The rules it usually needs
Written in plain English when the template is set up.
- One of several wordings
“The letter is the request from the incoming accountant, or the reply from the outgoing accountant.”
The document carries the wording for whichever applies, and the other wording is left out.
- Once for each item
“One row for each item of information requested or provided.”
The table has one row for each, so it grows or shrinks to match.
- One of several wordings
“The reply says there is no professional reason not to accept, or gives brief details where the client consents, or says the firm cannot give details.”
The document carries the wording for whichever applies, and the other wording is left out.
- Only when…
“Include the paragraph about information being sent only when information is being sent.”
When this applies, the paragraph about information being sent is included; when it does not, it is left out and the rest of the document is unchanged.
- One of several wordings
“The reply lists work due soon, or says there is none.”
The document carries the wording for whichever applies, and the other wording is left out.
- Only when…
“Include the outstanding fees paragraph only when fees are outstanding.”
When this applies, the outstanding fees paragraph is included; when it does not, it is left out and the rest of the document is unchanged.
Questions people ask
What is professional clearance?
It is the process where an accountant asks the client's current or previous accountant whether there is any reason, such as unpaid fees or a professional matter, why they should not take on the work. It is part of the ethical rules of the main accountancy bodies.
Do I need the client's permission?
Yes. The incoming accountant encloses the client's signed authority, and the outgoing accountant should not give out client information without it.
What should the outgoing accountant reply?
They should reply promptly, either saying they know of no professional reason not to accept, or giving brief factual details if the client has agreed.
What if the outgoing accountant says there is a problem?
The incoming accountant should consider carefully, and discuss it with the client, before deciding whether to accept. There may also be anti-money laundering matters that the outgoing firm cannot disclose.
Is a clearance letter a legal requirement?
It is a professional requirement of the accountancy bodies, rather than a legal one. It is also a safeguard for both accountants.
Use this template
It opens in DocuWeave as a template you can check, change and publish. Nothing is used until you do.