Tips for Avoiding Lawsuits

Source: Accounting Today 

Leading accounting professionals offer tips for avoiding lawsuits in litigious times. They include: 

• Assess your risk exposure as part of the client intake process. Do you have the resources and expertise to do the job right? Does the client have a history of suing accounting firms or jumping from one firm to another? Evaluate prospective clients on the basis of PACE – profitability, alignment, culture, and exposures.
• Create a solid engagement letter that defines the scope of the work and manages client expectations, and stick to it.
• Staff engagements appropriately, in terms of both numbers and quality.
• Communicate with the client throughout the engagement on billing matters (particularly on changes that may increase your fees) as well as on problems or warning signs you spot during the course of your work.
• Consider the risk profiles of new and existing clients. An individual who asks you to prepare a tax return presents less risk, and requires less intensive screening, than a startup business that fired its previous accountant.

For the complete article, read “Lawsuit Repellent.” 

From Accounting Today, March 7, 2014, www.accountingtoday.com.