An ‘accountant’s letter’ is a document prepared by an accountant at the request of their client for a bank, lender, or another party for the purposes of approving a loan, lease or rental agreement for a client. Accountant’s letters are also commonly referred to as ’accountant’s declarations’ or ’capacity to repay’ certificates.
CPA Australia, Chartered Accountants Australia and New Zealand (CA ANZ) and the Institute of Public Accountants (IPA) joint position on accountant’s letters is such requests should be declined, because the credit assessment is the responsibility of the lender. The lender has specific obligations under their credit license when making such assessments.
However, we understand that requests for accountant’s letters continue to increase and you may wish to support your clients when they are seeking credit.
Accountant’s letters, declarations and capacity to repay certificates – a toolkit for members has been developed by CPA Australia, CA ANZ and the IPA to support you to understand how you can appropriately support your clients through this process without inadvertently breaching professional standards, the law, or indemnity requirements.
The toolkit also provides guidance on the circumstances in which you may consider it appropriate to issue an accountant’s letter, as well as a range of templates which can also be accessed as stand-alone resources below:
- Accountant’s letters, declarations and capacity to repay certificates – a toolkit for members
- Letter to attach when sending client’s documents
- Accountant’s letter template
- Letter to client advising documents provided to lender
- Working paper checklist – Accountant’s letters
- Letter declining client’s request
- Information sheet for clients - Accountant's letters
- Open letter to lenders
Importantly, CPA Australia, CA ANZ and the IPA strongly recommend you only use the new accountant’s letter template provided as part of the toolkit if you consider it appropriate to undertake the engagement after following the joint guidance.
Further, an accountant’s letter cannot be provided in connection to a credit contract regulated by the National Consumer Credit Protection Act 2009 unless you are appropriately licensed under an Australian Credit license.