Historically, malpractice insurers have stressed the importance of record retention policies for CPA, and other professional, firms and the need to consistently apply those policies.
The advent of Electronic Discovery ( e –discovery ) has clearly muddied the waters. Just the financial costs alone, arguably, will cause plaintiffs to settle early in litigation.
The Pippins v.KPMG LLP case is a grim reminder of the need to have consistent, written record retention policies that are clearly articulated to clients , preferably in engagement letters or stand-alone letters.
CPA’S should review state boards of accountancy rules and regulations, the AICPA rules, taxing authority rues, and other regulatory bodies such as the SEC and GAO.