If you are selling or acquiring an accounting practice, you need to read the AICPA’s new guidance “Transfer of Files and Return of Client Records in Sale, Transfer, Discontinuance or Acquisition of a Practice,” which clarifies the obligations of the selling and the acquiring parties and explains how to deal with clients that do not respond to the notification of the transaction.Continue Reading Accountants M&A Alert: New AICPA Guidance on Transfer of Client Files
Peter Larkin provides legal counsel and representation to accountants and accounting firms in connection with all aspects of their businesses. He is co-chair of Wilson Elser’s national Accountants practice. In addition to professional malpractice defense and commercial disputes, Peter’s practice encompasses risk management, ethics proceedings, and transactional matters involving accounting firms. He also represents businesses and banking institutions in a wide array of commercial disputes.
We have assisted many accounting firms in the creation or revision of their client engagement letters. They very often question the need to include certain provisions intended to limit their liability to their clients and sometimes ask whether the provision is even enforceable. Whether the provision will be enforced is uncertain due to the very limited case law addressing liability-limiting provisions in accountants’ client engagement letters, and there could be variations in enforcement from state to state. Nevertheless, we regularly advise our clients to include the provisions, even if enforcement is uncertain, because the provision might just be accepted and never challenged, thereby serving its purpose, even if a court strikes it down after a legal challenge.
Continue Reading Deloitte’s $500 Million Sentence
In the most recent “North America Top Technology Initiatives Survey Results,” CPAs responding to the poll ranked “securing the IT environment” as the number-one priority, followed by “managing and retaining data,” “ensuring privacy,” “managing IT risks and compliance,” and “preventing and responding to computer fraud.” The top five poll results all relate to securing, managing or protecting the information entrusted to CPAs. The poll results are largely consistent with prior years and not particularly surprising in a world where data breaches routinely make national headlines, and CPAs receive and store large amounts of highly personal and confidential data. What is surprising and potentially alarming is the seemingly low levels of confidence the poll respondents had in their ability to protect data.
Continue Reading CPAs Need to Sharpen Awareness of IT Threats
For years, U.S. Department of Labor Chief Accountant Ian Dingwall has been advising employee benefit plan administrators to avoid using auditors who “dabble” in employee benefit plans. During this period, the DOL has consistently found that approximately one third of the employee benefit plan audits the agency reviews are deficient, and points to the firms that perform fewer than five of these audits as the most common offenders. Building on this public commentary, the DOL has worked vigorously to push out the dabblers, and the American Institute of Certified Public Accountants (AICPA) and a growing number of state boards of accountancy are supporting this effort.
Continue Reading Don’t “Dabble” in Employee Benefit Plan Auditing
Accounting firms often use post-employment restrictive covenants to prevent their clients and employees from being poached by departing partners and employees. As the number of accountants moving between firms has started to pick up again, so too has the number of disputes concerning the enforceability of the restrictive covenants those accountants signed at their former firms.
Continue Reading Revisiting Restrictive Covenants