Accountant Letters: When to Decline a Request in 2026

Decline an accountant letter that asks you to certify a client’s capacity to repay or give unsupported financial assurances. You can assess a narrower request for historical facts, with written client authority and a clear record of what you checked.

What the Request Asks You to Confirm

Read the statements you would sign before agreeing to prepare an accountant letter. A request for recorded income differs from a request to assess creditworthiness, confirm solvency or predict future earnings.

An accountant letter confirming income can describe a completed period and identify the records supporting the amount. A capacity-to-repay certificate asks you to reach a conclusion about the client’s ability to meet loan obligations. A financial-viability statement can extend beyond recorded results into whether the business can continue meeting its commitments.

Get the complete request, including attachments and any lender form. Identify the client entity, intended recipient, purpose and proposed use. Establish whether the recipient wants existing documents, factual verification or an opinion. A letter about a company’s results does not establish its director’s personal income.

The joint professional-body toolkit covers financing requests and requests for licences or similar approvals. An accountant declaration letter, accountant reference letter or income verification letter needs the same assessment. Its label does not decide what you are being asked to undertake.

When to Decline an Accountant Letter

CPA Australia, Chartered Accountants Australia and New Zealand (CA ANZ) and the Institute of Public Accountants recommend declining financing certifications. The lender owns the credit assessment. Identify any limited factual assistance separately before accepting work.

For small-business lending by subscribing banks, clause 78 of the Banking Code of Practice says banks will assess repayment capacity and will not request third-party certification of that capacity. The Code does not cover every lender or request. A broker’s or non-bank lender’s form still needs your professional assessment.

Credit licensing is a separate question. Under ASIC’s credit-licensing guidance, credit activities generally require a licence, appropriate authorisation or an applicable exemption. Tax agent registration alone does not permit repayment-capacity certification under the registered-tax-agent exemption.

ASIC’s Regulatory Guide 203 distinguishes factual verification of information already supplied to a lender from an opinion supporting the borrower’s ability to repay. A disclaimer does not decide whether your actual conduct is a credit activity.

Decline a request when it needs an unsupported prediction, exceeds your competence or requires credit activity you cannot lawfully undertake. For an accountant letter for a home loan, assess the requested conduct and credit contract before agreeing to help.

For a non-financing request, the professional bodies’ position requires a full audit before expressing an opinion on financial viability. A government licence application does not remove that requirement. A solvency letter from an accountant is not an ordinary income confirmation. Refer an assurance engagement to a suitably qualified practitioner if your practice cannot undertake it.

You can decline certification while explaining which historical documents are available. CPA Australia’s practical guidance identifies providing existing documents and appropriately scoped financial-information work as ways to assist. A client seeking a loan with just an accountant letter still needs the lender’s assessment.

Confirming Income From Records

Limit an agreed factual response to information you can support for the identified client and period. Obtain express written client consent before disclosing information to a lender, broker or other recipient.

Start with the precise figure requested. Turnover, accounting profit and taxable income answer different questions. For a self-employed client, identify whether the figure concerns the individual or an entity through which they trade. Keep the period and accounting basis beside the figure.

Build the supporting record before drafting the response:

• Identify the tax returns, financial statements or other records used, including the periods they cover.
• Record whether your practice prepared, compiled or audited the documents. Describe the work it actually performed.
• Reconcile the proposed figure to those records and explain adjustments that change its meaning.
• Identify client-supplied information that remains unverified and disclose the relevant limitations.
• Confirm the recipient and information covered by the client’s written authority.

Compiling accounts does not make them audited. Where you compile financial information, apply APES 315 Compilation of Financial Information and its reporting requirements. The professional bodies’ guidance distinguishes compilation work from assurance about the information.

A Self-Employed Client’s Income

In this hypothetical example, a sole trader’s completed annual accounts record a profit of $90,000. The lender asks for confirmation that the client will earn the same amount throughout the loan.

The historical observation concerns the $90,000 shown in the accounts, the period covered and how the accounts were prepared. The requested assurance concerns future income. Decline that prediction and assess whether a factual response or copies of the accounts meet an appropriately limited engagement.

Incorrect: Treating the recorded profit as proof that the client can meet future mortgage repayments.

Correct: Identifying the historical profit and its supporting records without expressing a repayment-capacity opinion.

Templates, Declarations and Lender Forms

Choose the response after assessing the engagement. A lender-supplied form is a request for particular statements, not permission to sign them.

Request	What to assess	Possible response
Client income letter	The income measure, period and supporting records	An appropriately scoped historical factual response
Lender-supplied declaration	Every certification, warranty and implied assurance	Decline unsupported terms and identify acceptable factual assistance
Business-purpose statement	The actual proposed use of funds and what the signature confirms	Assess the purpose and legal effect separately from income evidence
Non-financing licence request	Whether it seeks historical documents or a financial-viability opinion	Provide appropriate documents, or assess the audit engagement required for an opinion

A business-purpose statement does not establish income or prove capacity to repay. Keep that request separate from the accountant letter for a mortgage or business loan. Seek legal advice on a declaration whose effect you cannot establish.

The current toolkit includes financing and non-financing letter templates, a document-covering letter, a decline letter and a client information sheet. Read the guidance before choosing one. Preserve its relevant limitations and obtain advice before changing language that affects responsibility or reliance.

Use an accountant letter template only after deciding the proposed work is appropriate. For a rental application, assess the requested statements in the same way. A request to forward historical documents differs from a promise that the client can afford future rent.

Record the Decision and Follow Through

Keep enough in the practice file for another practitioner to understand the request, decision and response. The toolkit’s working paper checklist covers insurer advice, client discussions, scope and disclosure consent.

Retain the original request and lender form, your assessment, the records used and the final response. Keep the client’s written authority and approval of the agreed scope. Record who approved the response within the practice and what was sent to each recipient.

Discuss unfamiliar or high-risk wording with your professional indemnity insurer before accepting the engagement. Retain its advice and any conditions. A disclaimer or professional-body template does not itself establish insurance cover. Consider the relevant tax agent insurance obligations when assessing the request.

If the work is separate from the existing engagement, update the accountant engagement letter to explain its scope and limits. Agree the fee basis before work begins. An accountant letter’s cost reflects the records and work required, not how quickly someone wants a signature.

Tell the client whether you have declined, agreed to provide specified historical information or referred the proposed work. When referring, explain whether they need credit advice, legal advice or an audit engagement. Send only the documents authorised for the named recipient, and keep the response within the scope you agreed.