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Know your limit

Professional risks cannot be eliminated, but they can be managed. Christopher Arnull introduces new ICAEW guidance that can help.

Professional life can be hazardous. Uncertainties, misunderstandings, expectation gaps and mistakes can arise and cause problems. Risks for professionals cannot be eliminated completely but it makes good commercial sense to take steps to manage potential liabilities.

To assist ICAEW members in this important area, prior guidance on managing professional liability has been revisited and a new ICAEW technical release, 09/15BL Managing the professional liability of accountants, has been published along with a helpsheet which provides some illustrative wordings on selected topics.

Like its predecessor, the new technical release takes us through many features of a typical engagement and risks that may arise. There is varied guidance on navigating professional waters that can become quite choppy at times. The technical release is not a legal opinion, but inevitably there is a lot of law behind it and an independent law firm, Wragge Lawrence Graham & Co, checked the technical release and the helpsheet and confirmed that both are legally sound.

Member guidance

Important considerations and factors relevant to client and engagement acceptance and continuance are reviewed. Members are cautioned against inadvertently vouching for a client’s acceptability to other providers. Issues particularly relevant to private consumer clients are covered, as well as discussion about engagements to prepare wills, perform probate work or estate administration services. Managing client conflicts of interests is also captured.

This is an extract from an article in the November 2015 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.

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