Legal Liability—Practical Advice on Protecting the Firm
Source: Accounting Office Management & Administration Report
From the AICPA Practitioners Symposium in Las Vegas.
Here is a list of important matters related to the prevention of, and defense in, litigation:- Documentation can be a good defense or can cause serious damage.
- Electronic documents may never disappear. Deleting is not sufficient.
- Attorneys look at graphics files, voice mail, e-mail, instant messages, chat rooms, Web site files, temporary files, cookies, and deleted files.
- Language in marketing materials can be considered promises.
- Lawyers look at e-mail rather than work papers, which they don’t understand. E-mails by staff might create the greatest vulnerability.
- Before retaining a document, make certain it is something required by law or professional standards, and that you could safely show it to anyone.
- Failing to retain what is required can result in criminal penalties. Documents must be preserved if they may be needed in litigation or to discover admissible evidence. If you try to change a document (on a computer), there will be a record of the change.
- Create a policy for storing, retaining, and destroying documents. The existence of the policy will be helpful in litigation.
- Juries know that clients get what they are promised and what they pay for. So be sure to have a comprehensive engagement letter.
- Don’t accept clients who should be rejected.
- Determining and enforcing your policies on information management should be the responsibility of the top person and not be delegated.
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