Why Accountants Should Have Written Engagement Agreements With Small Long-Term Clients They Know and Trust
Many (if not most) accountants have many small clients who they have serviced on a long term basis where there is a great deal of trust between the client and the accountant. For a small client the accountant frequently only prepares the tax return and does a compilation because the client is a small business with one person having access to the checking account. This client does not want or need an audit.
Read More Risk Management - What Accountants Should Consider When Clients Elect to Change the Scope of Representation
Disputes can arise between accountants and their clients for a number of reasons. For accountants the most common type of risk exposure is a lawsuit for malpractice. Malpractice is the failure to act as an accountant using ordinary care would have acted in the same or similar circumstances. Often times disputes arise between the accountant and client due to misunderstandings regarding the scope of additional work that the accountant accepts on behalf of the client. For example, what factors should be evaluated if a tax planning client requests additional assistance with investment or retirement planning? Should accountants be limited in their abilities to provide these additional services to clients assuming the accountant has the requisite level of skill and expertise to assist the client?