Journal of Accountancy Podcast Professional liability Q&A: AI disclosure, retired-partner risk, and more
May 8, 2025
Sarah Ference, CPA, is the risk control director at CNA and an author renowned for her insights on professional liability. In this discussion, she explores the implications of AI use in CPA practices and the necessity of transparent client communication. She delves into the liability risks posed by retired partners, emphasizing the need for clear boundaries and guidelines. Additionally, she highlights the dangers of unintentional financial advice in casual client interactions, making a compelling case for proactive risk management strategies.
AI Snips
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Transcript
Episode notes
Disclose AI Use Thoughtfully
- CPAs should carefully consider whether to disclose their use of generative AI to clients.
- Disclosure helps clients make informed decisions and protects client trust.
Apparent Authority Risk
- Retired partners can pose liability risks through "apparent authority."
- Clients might mistakenly believe retired partners still act on behalf of the firm, creating risk.
Guard Against Retired Partner Risks
- Firms should clearly communicate and transition client relationships before partner retirement.
- Remove retired partners' access to client info and systems to reduce apparent authority risks.