NAPLIA has partnered with leading legal professionals for the development of sample engagement letters that are essential to your practice as well as articles and resources for your company's risk management.
With an increase in Cyber exposures and cyber claims against CPA firms, CPAs need to be aware of the strategies to minimize these risks and ensure that the strategies are legal. There are both national and international laws governing the ways in which firms combat cyber exposures. The article below explains the added exposures that may result from not knowing the laws.
Professional liability claims faced by CPAs will never be eradicated, but they can be reduced if solid risk management and constant adherence to professional standards are followed. Follow these techniques to help lessen exposure in the increasingly litigious environment in which CPAs practice.
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Much has been written regarding the exception from the hardship distributions rules resulting from retirement plan distributions and loans that have resulted from Hurricane Sandy. IRS announcement 2012-44 fully addresses the rules governing these hardship distributions and loans. CPAs need to make their clients aware of this relief , but equally as important make them aware of the misconceptions ,and the tax impact of such a distribution. Many professional liability claims originate from the failure to clearly explain and document to clients the projected tax effect of retirement plan distributions.
This article addresses the IRS announcement and several misconceptions associated with the announcement.
Creative Playthings Franchising, Corp v. James A. Reiser, Jr., 463 Mass. 758 (2012)
The Supreme Judicial Court, Suffolk County, Duffly, J., held that limitations period in a contract shortening the time within which claims must be brought was valid and enforceable under Massachusetts law, under certain conditions. A limitations period in a contract shortening the time within which claims must be brought is valid and enforceable under Massachusetts law, if the claim arises under the contract, and the agreed-upon limitations period is subject to negotiation by the parties, is not otherwise limited by controlling statute, is reasonable, is not a statute of repose, and is not contrary to public policy.
Nancy Reimer, attorney for LeClairRyan of Boston, stresses the relevance of this ruling for CPA's. Attorney Reimer suggests Accounts include a provision in their engagement letters limiting the time in which a claim can be brought to 2 years, or less depending on the circumstances of the engagement. Reimer stated, "We typically include clauses like this in letters we draft and have not had any issues with them, but now we have a definitive ruling from the SJC as to their validity."
Reimer further clarified that contract limitations are determined on a state by state basis. Although this ruling is great for Massachusetts, not all states concur. Florida, for example, has a statute stating a party can not limit the SOL period.
The NAPLIA CPA Alert is a regularly resource to provide our CPA, Accounting, and Bookkeeping clients with up to date information on topics that may directly impact their business.
Now, you can access these CPA Alerts via our new Linkedin Group.
Simply join here !
In addition to your professional liability (errors & omissions) insurance, education is the foundation of a strong Risk Management strategy. NAPLIA is leading the industry in providing our clients with sample engagement letteres, topical articles, White Papers, and more.
Personal information can exist in either a physical or electronic form. Regardless of the form in which the information exists, the standard of protection remains, only the implementation of that protection changes.
Physical copies of personal information can be easily protected by simply storing the information in a locked storage area. This area can be anything from a filing cabinet to a safe to a third party storage facility. So long as access to the information is limited to properly trained employees, any of these forms of locked storage should be sufficient.
See more about File Retention Policy
The storage and security of electronic personal information can be more complicated than the storage of physical personal information. The implementation of an electronic storage system can vary widely depending on the size of a company or firm, and the amount of information that must be secured. At a minimum, the WISP (Written Information Security Plan) must cover authentication protocols, including the use of user IDs and passwords and their security; secure and restricted access to the personal information records; the encryption of the electronic records; and the monitoring of the implemented systems.
Many electronic file systems and operating systems have a built-in function for the creation and maintenance of a user ID and password system. For larger firms and companies, a more robust system may be needed and can be found through third-party vendors.
Encrypted storage and transmission of personal electronic information can be implemented in many ways. Many manufacturers now sell USB drives and external hard drives with built-in encryption systems. For the encryption of current drives and file systems there are numerous programs available for purchase and comparable free programs as well.
State Security Breach Notification Laws
It is essential to be familiar with your particular State’s Security Breach Notification Law. At this time, 46 States have unique Security Breach Laws in place. NAPLIA provides you with a summary of each State Security Breach Law identifying:
- Date law was enacted
- Definition of Personal Information by State
- Notification Requirements
- Links to full State Statutes, and Laws
An Acceptance Agent is a person or an entity (business or organization) who, pursuant to a written agreement with the IRS, is authorized to assist individuals and other foreign persons who do not qualify for a Social Security Number but who still need a Taxpayer Identification Number (TIN) to process a Form 1040 and other tax schedules.
The Acceptance Agent facilitates the application process by reviewing the necessary documents and forwarding the completed forms to IRS.
View NAPLIA's Resources for Acceptance Agents
As a Certifying Acceptance Agent it is important to define your actual services for your clients and ultimately protect your practice. Your services as an Acceptance Agent are unique and you will want a specific engagement letter to address exactly what you are, and are not, providing to your client.
The Acceptance Agent Sample Engagement Letter can:
- Provide protective wording to minimize your exposure
- Assist you in marketing your practice by addressing additional services you can provide
- Mitigate your exposure with a Mediation Clause
Download NAPLIA's Sample Engagement Letter for Acceptance Agents now!
What you don't know about intellectual property could be hurting the value of your business. Believe it or not, your IP is your most valuable business asset. So what are you doing to protect it?
The truth is...
1. Every company, regardless of size, owns some form of intellectual property.
2. IP Owners must treat their IP with care and respect.
3. IP is the most misused, misunderstood, and misappropriated business asset today.
4. IP Owners need an Intellectual Property Owner’s Manual.
Find out what you don't know at this four part webinar series covering the four main areas of intellectual property law, patents, trademarks, copyright, and trade secrets.
This series is designed to give small business the information needed to make better decisions, improve the quality and value of their IP, and not dread the next meeting with the patent attorney.
Learn to think differently about your intellectual property.
Sign up for Free Webinars.
In some cases, it may appear that certain professional insurance policies overlap, or are intended to cover the same things.
Does my Errors & Omissions policy cover my acts as a Director?
What is the difference between professional liability and general liability?
Our Insurance Matrix provides a simple overview of some common professional liability policies and their intended coverage.
For more information simply contact us.