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Continuity Partner - Frequently Asked Questions

Frequently Asked Questions

Why do I need a CP?

You could die unexpectedly, become seriously ill or have an accident. There may be other situations in which you would need to pass over your work to your CP – for instance: a family emergency; unexpected caring responsibilities; financial difficulties such as bankruptcy or director disqualification; or the death or incapacity of a of a partner, director or key member of staff in your practice. Your premises could be put out of action by damage, such as fire or cyber-attack. We refer to these circumstances as an “event” in these FAQs.

The Member in Practice Rules state that a MiP must:

“ensure in the event of their illness, disability or death that services to clients are maintained, either through internal arrangements within the practice or through a written agreement with another accountant or firm (unless the client has indicated that he/she does not want to be subject to such an agreement).”

How do I ensure that my CP can provide the services my clients will need?

You may wish choose a CP working in the same service areas or who services similar clients or who has a similar skills profile. You will need to check with your CP that they or their business have sufficient capacity to take over your clients, at least in the short term. You should discuss with your proposed CP the nature of the services they will take over and check whether there are any difficulties – such as conflicts of interest – that might prevent them from doing so.

How do I find a CP?

The main way in which MiPs find a CP in the UK is through networking. This may be through the annual MiP Conference or CIMA regional events.

You can also go to https://www.cimaglobal.com/About-us/Find-a-CIMA-Accountant/

You can also join MiP Groups such as the Members in Practice LinkedIn Group 

Does my CP have to be a member of CIMA?

In some instances, it may be preferable to have a CP who is a CIMA member because of the nature of the services you offer, but members of other professional accountancy bodies can also be nominated.

In the UK and Republic of Ireland it is essential that whoever you chose is supervised for anti-money laundering and counter-terrorist financing (AML/CTF) compliance. AML/CTF processes and procedures must continue within the practice to ensure regulatory requirements are met.

Can I nominate a CP from my own practice?

If you are in a partnership or corporate practice and your practice is big enough, you may nominate one or more directors or partners in your practice to act as your CP. You should still sign a continuity agreement in this case.

Your CP must have the capacity to take over your work if required and be competent to do it. If you undertake any specialist work, for which you require separate registration (such as probate work) you must ensure that your CP(s) can continue to provide this service. Your CP or their practice may have to arrange to outsource any work that it cannot do in your absence following an event.

Can I have more than one CP?

Yes. It may be helpful to have more than one if you are a large practice or if you provide specialist services. You just need to ensure that all your CPs know about each other and what they are each expected to do if required.

Similarly, you need to make anyone who needs to know – including your clients – who they should contact in the event of your inability to do so yourself.

If you have more than one CP the best way to do this is to nominate a primary CP.

You should be cautious about having too many CPs. Sometimes new MiPs take on a temporary CP to enable them to complete their registration but you should find a CP that can best provide services following an event as soon as possible.

If you are a CP to a number of MiP partners you should remember that the need to keep in regular contact with all of them may become onerous on your practice. If you are a CP assessor offering to be a temporary CP you should ensure that your new MiP colleague sorts out a more permanent solution.
PC Assessors should be mindful of any conflicts of interest.

Should my CP be local to me?

If you provide most of your services locally then it may make sense for your CP to be as local as possible. However, this is not a requirement of the MiP Rules and where, for instance, you store files in the cloud, proximity may be less of an issue than it used to be.

If you provide specialist services it may be more difficult to find a local accountant providing similar services, so you may need to widen your geographic area when searching for a CP.

What should I expect from my continuity partner?

Your CP should be able to take over the services to your existing clients at short notice, starting with those you have identified as essential (see below). The continuity agreement should make clear that your CP does not have, and does not accept, any responsibility for the quality of the work prior to the agreement.

You should review your continuity agreement with your CP at regular intervals to ensure that it remains up to date and you both understand what may be required following an event.

What are essential services?

Regardless of how well prepared your CP is, it may still be difficult for them to take over your practice entirely, particularly at short notice.

An essential service will include anything with a deadline attached and may include any up-coming compliance deadlines such as submissions to tax authorities or Companies House, or deadlines for grant applications.

Other essential services may be less urgent but still important. This may depend on the point in the year at which your CP takes over. Their role may therefore be to provide short term continuity for clients until your business is sold or shut down, and ensure that the practice and its clients are in a good position to be handed over to another accountant.

Your CP should concentrate on essential services as a priority. It may be helpful for you to manage your clients’ expectations by explaining what your CP will or won’t be able to do and the sort of tasks they will prioritise.

If you are providing general business development advice then this may be regarded as less essential, but it is important to remain in communication with all clients so that they know what to expect following an event.

What happens when the services of my CP are needed?

To enable the CP to complete their responsibilities, they will need access to the names, addresses and the nature of work of all relevant clients. You may not be in a position to supply these yourself, which is why CIMA requires you to notify “interested parties” when you enter into your CP agreement and let your CP know who these are.

Good record keeping is a mark of a professional and it is particularly important when your CP needs to be able to access your client files.

What kind of records do I need my CP to have access to?

The following is not an exhaustive list as each practice is different, but it would be useful for your CP to be able to find:

  • Client names, addresses, contact numbers, services provided, fees charged, any special notes
  • Systems, processes, passwords (maybe in a sealed envelope somewhere safe)
  • Monthly timetable of events where some activity is performed regularly e.g. payroll

This is especially important if you are a sole practitioner as your interested parties may not have any other source of information about your practice.

How do I ensure that my CP is in a position to provide the services my clients will need?

The basic requirement is that your CP should be able to provide continuity of service at short notice. You will have established this before entering into your CP agreement. However the services you provide can change over time, as can the size of your practice. It is unfair to your CP if they are unaware of the present needs of your clients, especially as they may have to take responsibility for them at short notice.

CIMA recommends that you review your agreement every year. You should also have regular catch-up meetings with your CP about your service offering and any plans to provide new services or increase the size of your practice. This can be as formal as you wish – simply meeting for coffee a few times a year would probably be enough if you also undertake at least one formal review. If you cannot meet your CP, it would be sensible to speak on the telephone on a regular basis and/or remain in regular email contact throughout the year.

You should notify your CP if you plan to take on a significant number of new clients or provide new services, to ensure that they have the capacity to provide continuity of service if needed. You should also check, as far as is possible, the general financial health of your CP’s practice.

The more communication you have with your CP the better. You don’t have to wait for a catch-up or review, an email communication on a new service will suffice. You should also be straightforward and candid during reviews to give your CP the best chance of serving your clients from the start of an event. Although we recognise the difficulty of doing so, we advise that you notify your clients of any serious or terminal illness or any financial difficulties you may be having.

Your conversations with your CP and any disclosures you make should remain confidential (except of course, when you have to tell your interested parties).

I have staff – what will happen to them in the case of an event?

This is something you should discuss with your CP. It may be that your staff can continue to undertake much of the work of your practice after an event and the CP may simply take over the responsibilities required from a Practising Certificate holder, such as signing off accounts. Your staff may be asked to retrieve client files and contact clients on behalf of your CP and maintain an office, answering emails and telephones leaving the CP to concentrate on the work you yourself were responsible for.

Longer term, the CP may be expected to discuss the future of the practice with your interested parties if the practice is to be closed or sold and this may include staff. Remember that being upfront with staff will help your CP to provide continuity of service.

In the UK you may wish to use the Business Support Helpline. You can find details for this on the CIMAGlobal Website, under Benefits and Support for MiPs.

Is my CP expected to take over if I become bankrupt or disqualified as a Director?

CIMA expects its members to behave professionally at all times and this includes taking a professional approach to managing your own business. Regular review of to the business’ financial health may be all that is necessary prevent the risk of insolvency. We recommend that you include the financial health of your business in your review meetings with your CP and notify them of any problems. This will help you both to forecast the direction that your business may take and find an appropriate solution for servicing your clients.

The MiP Rules do not specify bankruptcy or director disqualification in the CP requirements, but you should consider the needs of your clients if you become unable to provide them with the services they expect under your terms of engagement.

CIMA recommends that you discuss the possibility of insolvency with your CP and ascertain whether they are willing to take on your clients following the dissolution of your business. If they are then you should include this as a clause in your agreement.

Remember that you have a duty to notify CIMA of any event covered by Regulation 19 of the Charter, Byelaws and Regulations. Should you wish to declare under Regulation 19 please email declarations@aicpa-cima.com

How will my CP be made aware of my change in circumstances?

In the event of sudden death or incapacity, you will be dependent upon others to be the first step in ensuring continuity of service. This is why CIMA requires you to notify any interested parties at the onset of a CP agreement.

Are there any other benefits in having a CP?

The regulations require you to have a CP, but a strong CP relationship may help in other ways.

For instance:

  • if you are a new MiP it may be beneficial to have a more experienced CP who may be able to act as a mentor or sounding board when you need it. Being a MiP for the first time can be a daunting prospect even if you are starting with just a few clients. The extent of your CP relationship will depend upon both of you and may develop over time.
  • CIMA does not provide technical support to Members and it is important that you feel competent to provide the services you offer. You may wish to use your CP as a sounding board if you are asked to provide any service that is outside your declared functional specialisms or to seek clarification on accounting standards.
  • An active dialogue with your CP may also assist you in making difficult decisions and indeed help in avoiding some of the problems that would lead to a CP being required to act.
  • There may be circumstances under which you may seek to hand over clients to another accountant – if you are heading towards retirement or if you decide to go into employment. You may wish to offer your CP first refusal on your clients, perhaps over a phased period, and a good relationship will facilitate this.

You may be able to ask your CP to provide holiday cover or cover for short periods of time – for example if you take a sabbatical or find you have carer responsibilities