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As an accountant, you will interact with several key types of contracts. Due to how regularly you will encounter particular forms of contract, it is valuable to have a basic understanding of them and how they relate to your work. This article will explain the key features of common types of contracts you will encounter as an accountant, including service contracts, confidentiality agreements, and consultancy agreements.
Service Contracts
Where a client seeks to engage your services, you will formalise your agreement with a service contract. A service contract sets the terms of your engagement and details what you and your client expect from one another.
Further, in a dispute between you and your client, you will refer back to your service contract. Where the contract is clear, you can settle disputes quickly and painlessly.
You might encounter a few common forms of service contracts as an accountant.
General Accounting Services Contract
A client may engage you to provide various general accounting services. Where a client has engaged you to act as their accountant for all or several matters, you will likely encounter a general accounting services contract. This contract will outline the scope of the duties you will perform.
Audit Engagement Agreement
Sometimes, your client wants you to perform an audit of their business. Audit engagement agreements typically outline the conditions of your service when providing the audit and the scope of the audit itself. The contract can also provide legal proof that your client’s business has been audited.
Tax Preparer Agreement
When a client engages you to prepare their taxes, you will likely encounter a tax preparer agreement. This agreement will outline the client’s duty to provide you with the necessary information and data and the scope of your engagement to prepare the client’s taxes.
Non-Disclosure Agreements
As an accountant, you have a duty of confidentiality regarding information you obtain in your role. Your service contract may also spell out your obligations to your client regarding confidential and private information. However, specific clients may feel more comfortable having you sign a separate non-disclosure agreement.
A non-disclosure agreement contractually obliges you not to share certain information with others. You will likely encounter non-disclosure agreements where you are contracted by clients working with patents, private data or other forms of confidential information.
The Australian Government is changing the law to protect consumer privacy after a series of high-profile data breaches and to bring the law into line with the safer and more protective laws in other regions. This fact sheet outlines what is expected in 2024.
Consultancy Agreements
A client may request that you provide an advisory or consultancy service rather than an accounting service. This may be due to an issue they are having with their accounts or a financial choice they want to make. In this case, you will likely deal with a consultancy agreement rather than a service contract.
A consultancy agreement outlines the terms of your contractual relationship with your client when providing them with consultancy services. Among other terms, the agreement will detail:
- your responsibilities;
- the client’s expectations of you;
- your expectations of the client;
- certain information you will need; and
- the compensation you will receive.
As with service contracts, it is essential to negotiate the terms of a consultancy agreement thoroughly and draft it clearly.
Key Takeaways
There are several key forms of contract that you will encounter as an accountant. You will likely encounter some or all of these contracts on a regular basis, so it is vital that you understand what they do and how they relate to your work.
Some key agreements include:
- service contracts;
- non-disclosure agreements; and
- consultancy agreements.
If you need help managing your contracts as an accountant, our experienced professional services lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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