LIABILITY ATTORNEY TO CPAS: TRUST YOUR INSTINCTS!
Las Vegas - Accountants need to be proactive in protecting themselves and their firms from liability and malpractice claims, particularly in the wake of the legal fallout from the Bernie Madoff scheme and similar high-profile scandals, where auditors have become a litigation target for burned investors.
"You are at the eye of the storm," Mary Eklund, a malpractice attorney at Eklund Rockey Stratton, in Bainbridge Island, Wash., told attendees at the AICPA Practitioners Symposium here, in early May. "You need to know how to select and fire clients. Do you have a Bernie Madoff client? ... Know what's happening with their business and, before you begin, make sure they sign an engagement letter. If they don't or won't, then fire them. Use your instincts."
Eklund said that in a bad economy, there would likely be more liability claims lodged against CPAs. Investors who lost money in the Madoff and other scandals are now suing the investment managers as well as the auditors. She suggested that there will always be the claims of, "You didn't find it soon enough or often enough."
"If you find yourself saying, 'I don't like what's going on with this client,' then get rid of him," she said. "Otherwise his problems are going to become yours."
ACCOUNTANTS' STRESS LEVELS RISE
Menlo Park, Calif. - Respondents to a recent survey reported that economic conditions have contributed to heavier workloads, higher stress levels and lower morale at accounting and finance departments around the world.
The survey, conducted by an independent research firm for Robert Half International for its third annual "Robert Half Global Financial Employment Monitor," was based on a survey of more than 4,800 hiring managers in finance and human resources across 21 countries.
Nearly half (48 percent) of U.S. respondents cited increased stress for individual employees, compared to 39 percent globally. Managers from Australia and Ireland, along with those in the U.S., reported the highest levels of stress among their teams (48 percent). The next most commonly cited effects, both globally and in the United States, were heavier workloads and decreased morale. Less than one third of all respondents in the U.S. (32 percent) said that their accounting and finance teams have remained unaffected.
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