Many CPA firm owners worry about the looming threat of potential litigation—and understandably so. In the wake of the last decade’s major financial scandals, and increased regulatory burdens placed on accountants everywhere, there is less and less lenience shown toward CPAs who seem as though they’re skirting the law.
But that doesn’t mean litigation is inevitable. It just means you have to be prepared. Take action to stave off litigation and keep your firm and all of its accountants in the clear.
We’ll show you how.
Invest in Ongoing Training
It’s easy enough for your junior accountants to break the law when they’re not entirely sure what the law says—and even senior accountants can lapse as laws and regulations change. Litigation often comes as the result of simple ignorance, but that’s something you can combat with regular training sessions and educational resources for your team.
Beware of “Kids” With Too Much Control
Many prosecutors will be especially unfavorable toward the idea that you let your JV team handle big accounts unsupervised. Make sure you’re not sending “kid” accountants out on their own. Though these junior team members can be invaluable, there should always be a senior staff member to offer supervision for every client engagement.
Enforce Strong Document Retention Policies
Your team should be keeping meticulous records—not just paper documents but electronic ones, including emails, text messages, and blogs. Even messages sent from a home computer should be encompassed by your document retention policy.
Review Your Communications Policies
Remind your staff members that anything they send in an email, text, or instant message can be discoverable, so maintaining robust standards of professionalism, across all written communications, is key. If something can be said in person rather than written out, that’s almost always better.
Get Good Allies
To help protect your firm from litigation, you’ll want to consult with both a local attorney, who specializes in defending CPAs, and also a good insurance company. Ask the lawyer for some good insurance recommendations, and ensure that you have sufficient coverage.
We live in a litigious society, and unfortunately, CPAs have found themselves becoming easy targets—but with the right level of foresight and caution, you can ensure everything at your firm is totally above-board.