An accusation of negligence can be extremely stressful for a firm and its advisers. The best strategy is to manage risks in this area, but in order to manage risks, you need to identify them.

This is a freeview 'At a glance' guide to avoiding negligence claims.

At a glance

What is negligence in terms of an adviser?

The answer is to consider what a hypothetical reasonably competent accountant would do in the same situation.

  • Would they seek specialist advice?
  • Would they take a second opinion?
  • Would they have minuted (written down) all the advice they have given?
  • Would they have recorded phone calls?

What a reasonably competent accountant can do will depend on what terms has the client agreed to:

  • Has the scope of the engagement been agreed?
  • Is there a signed Letter Of Engagement (LOE) in place?
  • Are the terms of the engagement up to date?

No firm is perfect and mistakes do occur.

Firms should assess their risks and vulnerabilities.

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