A Checklist for Risk Management

Source: Bowman’s First Alert

1. Create a client acceptance process. This should include a team to assess new engagements. Strictly adhere to the process.
2. Be certain you have the ability and the resources to do the job.
3. Check out the new client with, among others, prior accounting firms.
4. Train staff on what kind of risk is acceptable and the preferred client profile.
5. Turn down clients that do not measure up.
6. Continually review existing client relationships.
7. Make sure you know what the client expects, and document it. Communicate regularly with clients about this. Update engagement letters.
8. Evaluate other professionals on whom you will rely (e.g., actuaries).
9. Clients should be told explicitly about your billing policies, including your arrangements with third-party providers.
10. Understand how outside parties will rely on your reports.
11. Engagements in the tax area are high risk. Be diligent about keeping current with all tax changes that might affect your clients.
12. Stay up-to-date on all regulatory changes affecting specific types of clients.
13. Participate actively in your CPA society to understand changes in the profession.
14. Evaluate your internal controls.
15. Carefully prepare any letter of termination to a client. Have other partners and your insurance carrier review it.
16. When you have doubts about the conduct of an engagement, consult your insurance carrier.

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From Bowman’s First Alert, Vol. III No. 24, Bowman Communications, 323 Wilcrest Drive SW, Atlanta, Georgia 30044-5253, 770-972-0783.