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