Professional clearance letter template
APES 110 section 320 (Professional Appointments) requires an accountant asked to replace another accountant to determine whether there are reasons not to accept, and asking the existing accountant for relevant information, with the client's permission, is the usual way to do it. These original templates cover the client authority, the request and the reply.
These are starting points, not finished legal documents. Adapt them to your firm and the engagement, and have them reviewed by the firm before use. General information only, not legal advice. Section references are to the compiled APES 110 Code of Ethics for Professional Accountants (including Independence Standards), compiled as at July 2025, reviewed 18 October 2026. Section 320 applies in the same way to members of CA ANZ, CPA Australia and the IPA.
What APES 110 section 320 requires
Section 320 of APES 110 is headed Professional Appointments. The parts that matter for a change of accountant are:
| Paragraph | What it says (paraphrased) |
|---|---|
| R320.4 | When asked to replace another accountant, when tendering for another accountant's engagement, or when doing work complementary or additional to another accountant's, you must determine whether there are any reasons for not accepting the engagement. |
| 320.4 A4 | An example safeguard is asking the existing or predecessor accountant for any known information that, in their opinion, you need to be aware of before deciding whether to accept. |
| 320.5 A1 | You will usually need the client's permission, preferably in writing, to start discussions with the existing or predecessor accountant. |
| R320.6 | If you cannot communicate with the existing or predecessor accountant, you must take other reasonable steps to obtain information about possible threats. |
| R320.7 | When responding to a proposed accountant, you must comply with relevant laws and regulations and provide information honestly and unambiguously. |
| 320.7 A1 | You are bound by confidentiality. Whether you can discuss the client's affairs depends on the engagement, whether you have the client's permission, and the legal and ethics requirements. |
| R320.8 | For an audit or review of financial statements, the request to the predecessor is mandatory, and specific rules apply if the client consents or refuses. |
| AUST 320.2.1 | Section 320 also applies when the other accountant is not a member of a professional body. |
For non-audit work such as tax returns and bookkeeping, contacting the previous accountant is an example safeguard rather than a stand-alone requirement. The requirement is to determine whether there are reasons not to accept. Most firms send a request on every new client because it is the simplest way to show that determination was made. "Professional clearance" and "ethical clearance" are common names for this request; APES 110 itself uses the terms existing or predecessor accountant and proposed accountant.
A clearance request is different from a request to hand over records. Ask for records separately, or in a second part of the same letter, so the ethical question is answered on its own terms. The previous firm's engagement letter should say who owns documents and whether it has a lien policy (APES 305 paragraph 4.9).
CA ANZ, CPA Australia and IPA members
APES 110 defines the Professional Bodies as Chartered Accountants Australia and New Zealand, CPA Australia and the Institute of Public Accountants. Members of all three follow section 320, so these templates work whichever body you or the other accountant belong to. AUST 320.2.1 also covers the case where the other accountant is not a member of any of them. The bodies' own By-Laws and regulations we reviewed add no separate clearance letter wording. A member's failure to follow APES 110 can be dealt with under that body's disciplinary process, for example IPA By-law 3.1.16.
| Requirement | Where it comes from | Applies to |
|---|---|---|
| Determine whether there are reasons not to accept (R320.4) | APES 110 section 320 | Members of CA ANZ, CPA Australia and the IPA |
| Client permission before discussing affairs (320.5 A1, 320.7 A1) | APES 110 section 320 and Subsection 114 | Members of all three bodies |
| Name your own body in the letter | Optional. Template 2 has a placeholder | Any member |
| Ownership of documents and any lien | APES 305 para 4.9 (in the previous firm's engagement letter) | Members of all three bodies |
| Scheme statement on letterhead | Professional Standards Councils disclosure factsheet | Only firms participating in their body's scheme |
How to use these templates
- Get the client's written authority first (Template 1). APES 110 says permission should preferably be in writing.
- Send Template 2 to the previous accountant with a copy of the signed authority.
- If you get no reply after a reasonable time, follow up once and record it. R320.6 then requires other reasonable steps, for example asking the client directly about the reasons for the change and checking public registers. Record what you did.
- If you receive a request, use Template 3. Reply only with the client's permission, and answer honestly and unambiguously.
- Keep the request, reply and your acceptance decision on the client file.
Template 1: Client authority
Authority to contact my previous accountant
To: [Previous accountant name and firm]
I/We, [client full name(s)], [for myself / as director(s) of [company] / as trustee(s) of [trust or fund]], authorise you to:
- discuss with [new firm name] any matters about my/our affairs that, in your professional opinion, [new firm name] needs to know before deciding whether to act for me/us; and
- [optional] give [new firm name] copies of the documents listed below, once any amounts due to you are settled or other arrangements are agreed.
Entities covered: [list each entity, with ABN where applicable].
Documents requested [optional]: [for example, prior year tax returns and financial statements, depreciation schedules, CGT cost base records, trust deeds, company registers, SMSF documents, last lodged BAS, ATO correspondence].
Signed: ______________________ Name: [name] Capacity: [capacity] Date: [date]
Template 2: Professional clearance request
[New firm letterhead, including the scheme statement only if you participate in your body's professional standards scheme]
[Date]
[Previous accountant name]
[Firm]
[Address or email]
Dear [name],
[Client name(s)]: request for professional clearance
[Client name(s)] [has / have] asked us to act as [their] accountant and tax agent for the following entities and services:
- [Entity name, ABN]: [services, for example tax returns and financial statements from the year ending 30 June [year]]
- [Entity name, ABN]: [services]
Before we decide whether to accept this appointment, and in line with section 320 of APES 110 Code of Ethics for Professional Accountants (including Independence Standards), we would be grateful if you would tell us whether you are aware of any professional or ethical reason why we should not accept it. Please include any facts or information that, in your opinion, we should know before deciding.
A copy of the client's signed authority is attached.
[Optional: Separately, the client has asked for copies of the documents listed in the authority. Please let us know if any fees are outstanding or if there is anything you need from the client before releasing them.]
We would appreciate your reply by [date, for example 14 days from this letter]. If we do not hear from you by then, we will take other reasonable steps to obtain the information we need before making our decision.
Thank you for your help.
Yours sincerely,
[Name], [designation, for example CA, CPA or MIPA, in line with your body's rules]
[Position], [New firm name]
[Phone] [Email]
Attachment: client authority dated [date]
Template 3: Reply to a clearance request
[Previous firm letterhead, including the scheme statement only if you participate in your body's professional standards scheme]
[Date]
[Name]
[New firm]
[Address or email]
Dear [name],
[Client name(s)]: your request for professional clearance dated [date]
Thank you for your letter and the copy of the client's authority dated [date].
[Choose one of the following options and delete the others.]
Option A (no matters to raise): We are not aware of any professional or ethical reason why you should not accept this appointment.
Option B (matters to raise): There are matters we believe you should be aware of before deciding whether to accept this appointment. [Describe the facts briefly, accurately and without opinion beyond what is needed, for example a disagreement about the treatment of [item], outstanding information requests, or concerns about the completeness of information provided.] We would be happy to discuss these by phone.
Option C (no permission): We have not been able to confirm the client's permission to discuss their affairs with you, so we cannot comment further at this stage. [For an audit or review of financial statements, where the client has failed or refused to give permission, say so expressly, as R320.8(b) of APES 110 requires.]
Records [optional]: [We attach the documents requested. / We will release the documents requested on [date or condition]. / The following fees are outstanding: $[amount]. Under our engagement terms, [describe lien policy or release arrangements].]
Please contact me if you need anything further.
Yours sincerely,
[Name]
[Position], [Previous firm name]
Things to watch
- Keep fees separate. Deal with any outstanding fees in the records part of the reply, not in the answer to the professional question.
- Be factual. R320.7 asks for honest and unambiguous information. Describe what happened rather than characterising the client.
- Confidentiality. Without the client's permission, the previous accountant is generally bound by confidentiality under Subsection 114 of APES 110, subject to the exceptions in paragraph 114.3 A1.
- NOCLAR. For audit and review engagements, R320.8 cross-refers to the non-compliance with laws and regulations provisions at R360.21 and R360.22. Read those if the change involves actual or suspected non-compliance.
- Family groups. List every entity in one request so the previous accountant can answer for all of them at once, and include an authority signed for each entity.
Donagh Chisholm, Accountant and Owner at Chisholm Accounting, on Nagaris: "I sent six ethical letters in the first day of using Nagaris." See client onboarding and the engagement letters guide.
Questions
Is a professional clearance letter mandatory?
For an audit or review of financial statements, APES 110 R320.8 requires the request. For other work, R320.4 requires you to determine whether there are reasons not to accept, and asking the existing accountant is an example safeguard in 320.4 A4.
Which section of APES 110 covers professional clearance?
Section 320, Professional Appointments, in the compiled APES 110 Code of Ethics (compiled as at July 2025). Paragraphs R320.4 to R320.8 deal with changes in professional appointments.
Do I need the client's permission?
APES 110 paragraph 320.5 A1 says you will usually need the client's permission, preferably in writing, to start discussions with the existing or predecessor accountant.
What if the previous accountant does not reply?
R320.6 requires you to take other reasonable steps to obtain information about any possible threats. Record what you did.
Sources
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