A Guide to Crisis Management

Source: Journal of Accountancy

Businesses can be in crises because of natural catastrophes, theft, death of key partners (or multiple deaths in one disaster), etc. Here is a guide to anticipating and dealing with disasters:

• Recognize where you are potentially susceptible to loss, e.g., loss of key people, loss of key clients, natural catastrophes, etc.
• Identify specific risks associated with each of the above.
• Set up a crisis management scenario, and identify who will be responsible for every possible problem.
• Decide how information will be communicated to people inside and outside the firm.
• Create a written plan and store it in a safe offsite location.
• Conduct practice sessions.
• Prepare periodic updates to the plan.
• Designate the top leader as the one to set the plan in motion.
• When the plan is set in motion, advise people inside and outside the firm that the crisis is being handled. Update everyone periodically.

When creating your plan, it may be helpful to review previous articles on the subject: Journal of Accountancy: “Katrina’s Harsh Lessons,” June 2006, page 54; “The Best Laid Plans,” May 2004, page 46; “Before the Deluge and After,” April 2003, page 57.

Also see “Resources to Assist CPAs in Business Continuity Planning” in this issue of CPA Leadership Report.

From Journal of Accountancy, December 2006, http://www.aicpa.org/pubs/jofa/joahome.htm. For the complete article, click on the following link: http://www.aicpa.org/pubs/jofa/dec2006/dennis.htm.