Accounting Today Podcast
Emerging risks for accountants
Oct 16, 2023
Accountants discuss emerging risks including tax examinations, financial statement reporting challenges with cannabis, noncompliance with laws and regulations, and payer's to entity tax. They provide advice on protecting oneself during tax season, the importance of billing regularly and using engagement letters, and proactive measures for preventing lawsuits and claims.
29:47
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Quick takeaways
- Accountants face new risks such as tax examinations and financial reporting challenges with cannabis, and perennial threats like failure to detect fraud and conflict of interest.
- To mitigate risks, accountants should focus on client screening and diligent client selection processes, use engagement letters with clarity on data verification and multi-state returns, grade clients to identify problematic ones, maintain regular and timely billing, and communicate with insurance brokers for effective risk management.
Deep dives
Main Idea 1
Accountants face new risks and perennial threats that can lead to lawsuits and liability issues. Some of the new risks include tax examinations, financial reporting challenges with cannabis, noncompliance with laws and regulations, and the employee retention credit. Perennial threats include failure to detect fraud, missed time-sensitive elections, conflict of interest, and required skill set inadequacy. Accountants must be cautious with new clients, pay attention to upcoming tax season challenges, and carefully consider venue and jurisdiction in case of disputes.
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