Attestation Update – A&A for CPAs

Technical stuff for CPAs providing attestation services

Comments by attorney on risk management

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At attorney representing a malpractice carrier had some interesting comments on managing our practices.

Disclaimer:  I attended an A&A update a few months ago (yes, yes, I know – this series of posts has been on the back burner for a long while). Since I’m going to paraphrase comments from speakers who were presenting their personal opinion, I’m not going to mention their names. Just know that these aren’t my original ideas, but you can blame me if you don’t like the way I phrase things.

One thing this attorney encounters regularly is the idea that if something was only done orally, it doesn’t exist.

You need to have something in the workpapers to support your assertion that something was said, or a conversation took place, or you were given information, or you gave certain advice.

Finding an on-point memo in the file will bring a big smile to a claims manager.

I’ve made the comment before that a sloppy, barely coherent comment scribbled in the workpapers could be invaluable if you get into a jam.

A now barely understandable note like “Mary/will recvr full valeu in 5-6yr-no alllow” could save the day if Mary denies telling you she is certain an allowance is not needed because the investment will be fully realized in 5 or 6 years. Without that scribbled comment, nobody will believe you over her.

The best thing would be a coherent 75 word memo, but failing that, a scribbled comment will be wonderful.

A couple of things the presenter said that would really help us mitigate risks:

  • Screen potential clients carefully – run some sort of background check
  • Educate our clients about risk and our duties
  • Document the day-to-day contact with clients and advice we give
  • Listen to our own gut instinct on who won’t be a good client

Written by Jim Ulvog

February 4, 2014, 7:24 am at 7:24 am

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