Accountant's letters
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 was developed by CPA Australia, CA ANZ and the IPA and first issued in May 2023.
It has now been updated in December 2024 to reflect revisions in the 2025 Banking Code of Practice (the Code) issued in July 2024 and which commences 28 February 2025. The Code sets out standards of practice and service by banks that have subscribed to the Code in relation to individual and small business customers, and their guarantors.
The Professional Bodies welcome this update to the Code, in particular clause 78 which now states “We will not ask a third party (such as your accountant) to certify that you can repay the Loan”. This is a position we have advocated for with banks and other lenders for many years. As the Code does not cover all lenders, clients or types of confirmations, we expect members will continue to receive requests for Accountant’s Letters. If you do receive a request, we strongly recommend you apply the guidance and use the templates in this toolkit to respond appropriately.
The toolkit will 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.