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.
See NAPLIA Resources on Record Retention
