Improving Accountant Communication

Posted on: September 28, 2016 by Huntersure

Legal costs associated with lawsuits can cost accountant firms hundreds of thousands of dollars, depending on the duration and charges of the case. As your clients perform a variety of tasks that subjects them to risk, a comprehensive Accountant Professional Liability policy can mitigate risks and the financial burden of a lawsuit. Here are some helpful tips to improve accountant communication and prevent lawsuits.

An engagement letter is the best way to protect a firm against legal claims. Alvin Fennell III, vice president at Aon, and Jeffrey Day of CNA told Accounting Today that since there’s no universal agreement on the definition of what an accountant does in an average engagement, having an understanding at the outset of the engagement is vitally important.

Day explains, “The engagement letter is an extremely important way to minimize client disputes between what is expected and what is actually done, whether it’s for a fee or a service.” By outlining the scope of work, a miscommunication is less likely and a legal battle can be avoided altogether.

While larger firms are more likely to use engagement letters than their smaller counterparts, they are recommended for any sized firm. Small firms tend to rely on client relationships to determine the scope of work. However, that leaves plenty of room for discrepancies. If the scope of work changes, the engagement letter should be updated and signed by both parties to protect the firm.

The letter should include the scope of work, list deliverables, and identify responsibility of the firm and client to minimize confusion and identify who is responsible for what.

At Huntersure, we offer specially designed programs for accountant firms that provides coverage for third party claims as a result of negligent acts, errors, performance, and services. For more information about our products and services, contact us today at (855) 585-6255.

Posted in: Accounting blog

Tagged: accountant communication tips Accountant Professional Liability improving accountant communication reducing accountant liability