One of My Pet Peeves
December 31, 2012
Hope everyone has a healthy, prosperous and happy new year.
Everyone has a few pet peeves. I was reminded of one [of many] a few days ago and I have to get it off my chest. Accountants who practice law without a license.
If you have an accountant who is forming your business entities, reviewing your contracts, negotiating your contracts, offering to be your business guru, wants to represent you in the sale or purchase of accounts or your business, wants to be the executor of your estate and the trustee of your trusts - get rid of him or her. Accountants are great for financial statements and preparing tax returns. Can they be smarter than your lawyer? Sure. I'm generalizing.
I got a request to value an alarm company. There's a divorce action and the wife makes the request for the valuation through WhatsMyAlarmCompanyWorth. I provide the information. She calls for more information and upgrades her valuation request and get another more detailed analysis. Weeks go by and I get a call. It goes like this:
Mr. CPA: Hi Mr. K, I am sitting here with Mrs. X and we have a few questions for you. She is selling her interest in the alarm business and I have a few questions.
Me: Who are you?
Mr. CPA: Her accountant
Me: Does she have a lawyer?
Mr. CPA: No
Me: Then who is representing her?
Mr. CPA: I am helping her and I have just a few questions I think you can help with.
Me: I don't help accountants practice law without a license. Tell her to get an attorney.
So that was the end of the call. Why would someone selling probably the single most significant asset in their life not get proper represention, starting with someone licensed to do what they do.
It has happened too many times that a client will call and ask a corporate question and when I ask who formed the corporation I am told it was the accountant. Either forming it or formed it. Before I hang up I usually tell the client to let the accountant know I offered to do the tax returns from now on.
I can't remember the last time I prepared a will naming the accountant as executor. Estates are generally the accountant's last hurrah and I won't abide self dealing by a fiduciary.
By no means am I suggesting that accountants don't have their place, purpose and value. They do and each have their own abilities and expertise. But some cross the line either to make a buck or try and manage more of the client's life and affairs than accounting and financial issues.
By the way, if your lawyer also does tax returns, get a new lawyer unless he's your tax attorney.
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