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Australianbiz Accountants Forum → Sample Questions & Answers → Accountants Signing Bank Letters
 

Topic: Accountants Signing Bank Letters

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Accountants Signing Bank Letters
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As an accountant, should I be signing one of those letters requested by banks when a client is applying for finance?



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Due to the risk of a client defaulting on the loan and the bank seeking to recover the loan shortfall from the accountant, it is recommended that you don’t sign these letters.

Banks and other financiers are big enough to do their own due diligence when it comes to providing loans to their customers.

However, in some cases, you may be pressured into signing the letter by a client in which case you should assess whether you should retain the client.

If you are required to sign such a letter, you should exercise a “high degree of caution” which includes heavily disclaiming the letter.

Many accountants have expressed the view that our professional bodies should be doing more to stop banks and other financiers putting the pressure on them with these loan letters.

CA ANZ has made representations to APRA suggesting that a lender could ask for an accountants letter as one method of verifying a borrower’s income or financial affairs, especially for those self-employed.

CA ANZ has also written to lenders and their associations to inform them they will continue to advise members not to complete these letters.



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