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  • Jul 22nd, 2016 12:11 pm
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Deal Fanatic
Oct 7, 2007
5096 posts
1776 upvotes
This is a tough situation. While I can appreciate how the OP must feel, it could be that completing the job did take the accountant the number of hours billed. A true professional would have had the OP sign an engagement letter detailing the terms of engagement including billing details but that is not helpful after the fact. I agree that asking for a timesheet detailing how the hours were spent would probably assist in understanding how the time was spent. Someone I know offers consulting services and bills their time like a lawyer and provides a detailed bill each month to their clients. While this method has not completely avoided issues with people just not paying their bills, there have been very few challenges to the time spent and billed and I have to believe the details speak for themselves.
Deal Fanatic
User avatar
Mar 20, 2009
8862 posts
2674 upvotes
Vancouver
This is a tough one. Clearly if the accountant exceeded their estimate by 3x without contacting you, that was unprofessional behaviour by the normal standards of business. Some might call it exactly as expected for the profession though - I have noticed that tax accountants in general tend to be a bit arrogant with customers, feeling that it's beneath them to explain their billing (unlike tax lawyers, who are much more expensive but always happy to explain. :) )

If there was no firm agreement, then there is no contract. However the position of the accountant may be that you had a verbal conversation where they gave you an estimate, and you authorized them to go ahead on that basis. A verbal contract is still a contract. The evidence that there was an agreement is that you granted them access to your tax account. They did complete the work and send you an invoice. Perhaps they should have contacted you when they went way over the estimate, but they have no legal obligation to do so if they warned you it was an estimate and could go higher, which they would probably say that they did.

So at this point you have to consider your business reputation. You should ask for an itemized bill from the accountant, and an explanation of why it was way over the estimate. You should review that with another accountant to determine if it is a reasonable and normal amount for the work done, given the parameters of your company. If so, you should pay it and chalk this up to experience, never mind that the accountant gave you a bad initial estimate. If not, send them a cheque for the initially-estimated amount along with the information you have received about why the billed amount is excessive, and tell them that they have to accept the cheque as payment in full. Send a response to the collection agency saying that you dispute the validity of the invoice, but do not give them any other details. You just want it on record that you dispute the invoice - they will ignore your response anyway, and any other details you provide they would simply use to harass you.
[OP]
Sr. Member
Oct 23, 2010
619 posts
76 upvotes
Update:

1. Found out accountant's designation is CPA student in Ontario in good standing (can a CPA Student file individual and corporate taxes?)
2. Lawyer gave me the following advice:
a. To settle with collections at a lower amount
b. Avoiding to settle would result in collections agency reporting this debt to my personal credit report (not sure how this can be true if the collections agency is requesting debt from my corporation)
c. Fighting with collections agency on the validity of the invoices from the accountant will not lead in a positive result and would be a waste of time

I am drafting up a complaint for CPA Ontario/Canada that I will submit if accountant is not willing to resolve this issue amicably

Thoughts?
Deal Addict
Jun 12, 2015
2127 posts
725 upvotes
Ontario
MicroJimnt wrote:
Jul 14th, 2016 10:40 pm
Update:

1. Found out accountant's designation is CPA student in Ontario in good standing (can a CPA Student file individual and corporate taxes?)
2. Lawyer gave me the following advice:
a. To settle with collections at a lower amount
b. Avoiding to settle would result in collections agency reporting this debt to my personal credit report (not sure how this can be true if the collections agency is requesting debt from my corporation)
c. Fighting with collections agency on the validity of the invoices from the accountant will not lead in a positive result and would be a waste of time

I am drafting up a complaint for CPA Ontario/Canada that I will submit if accountant is not willing to resolve this issue amicably

Thoughts?
Anyone can file tax returns. You just want someone competent to do it.

That Cpa student better not have mislead you to thinking they are a cpa while dealing with them originally. That's penalty right there
Member
Aug 17, 2011
448 posts
141 upvotes
CALGARY
OP, if you can finesse things a bit, you can probably make this work out fairly for everyone. Simply draft an email explaining:

"Hi Accountant. I didn't realize this before, but I understand that you are a CPA student. I was under the impression that you were a fully-designated CPA, and able to practice public accounting. I didn't realize that students were not able actually practice public accounting, nor give that impression to the public.

I don't want to cause any problems for you in having to go to the CPA Institute about the above, but if things continue to escalate, and you don't remove your complaint from collections, I won't have much choice. Here's a cheque for $x.xx (amount of original invoice), in full and final payment of your services."

Accountants don't like having the professional body scrutinize them at all. A student even less so. A student who is practicing public accounting without their license is in for a huge ***** storm from the professional body should CPA find out, so it's a nice "Carrot-or-stick" situation that you can likely make work in your favour.
[OP]
Sr. Member
Oct 23, 2010
619 posts
76 upvotes
Hansol wrote:
Jul 15th, 2016 12:11 pm
OP, if you can finesse things a bit, you can probably make this work out fairly for everyone. Simply draft an email explaining:

"Hi Accountant. I didn't realize this before, but I understand that you are a CPA student. I was under the impression that you were a fully-designated CPA, and able to practice public accounting. I didn't realize that students were not able actually practice public accounting, nor give that impression to the public.

I don't want to cause any problems for you in having to go to the CPA Institute about the above, but if things continue to escalate, and you don't remove your complaint from collections, I won't have much choice. Here's a cheque for $x.xx (amount of original invoice), in full and final payment of your services."

Accountants don't like having the professional body scrutinize them at all. A student even less so. A student who is practicing public accounting without their license is in for a huge ***** storm from the professional body should CPA find out, so it's a nice "Carrot-or-stick" situation that you can likely make work in your favour.
Thanks Hansol. Appreciate the insight. I will do what you have advised and provide an update once I hear back.

Thanks everyone else for the support as well, I am very greatful for you guys taking the time out of your day to help me out.
Member
Feb 23, 2015
349 posts
13 upvotes
Mississauga, ON
From having 2 family members as accountants, my knowledge is that working is part of being a CPA student starting in their 3rd year, I think their studies go for 5 years. From the beginning they become members of the CPA governing body. If you say he pretended to have (final) CPA designation he might say he stated being a (3/4/5 th year student) over the phone.

Hope you have his business card (which shows some designation he is not yet entitled to), if not send someone to get a biz card out of him.

Maybe accountants have something like a BBB where you can find their reviews, something to search for, or just ask the CPA governing body or website about how to go researching their members.
Deal Fanatic
Oct 7, 2007
5096 posts
1776 upvotes
I missed the part about the CPA being a student. Do you know this for a fact? If the accountant is a student I think you have something because there are very strict rules about what you can and cannot do when you are part of the CPA body AND there is a difference between being a student and a true CPA. Furthermore, CPA's must be registered in public practice, which comes with its own set of requirements, before they can provide such services to the public. Under the former system pre-CPA, it was possible for students to provide tax services to the public but they still had to be registered. I am guessing that your accountant does not want to fall out of compliance with the CPA body because the CPA body works hard to maintain the high standards and reputation of its membership.

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