Accounting, tax, consulting, and practice management highlight hybrid event

The recent Integra International World Conference held in Miami, Florida, was a testament to how rapidly and well accountants have adopted to the “new normal” that the pandemic has created. By the time of the prior World Conference conducted remotely in October 2020, members were already well versed with the Zoom platform and other online tools required by the lockdown. This year, a large contingent convened in person at Miami Beach, while those restricted by travel logged in via Zoom. Hopefully by next year, all can gather together in London, though the hybrid approach may have a life beyond the pandemic.

Integra 2021 Firm of the Year, KSDT, CPA, hosted a highly successful event while also leading a number of the sessions. Along with diverse topics such as transfer pricing tax implications, client advisory services, investments in uncertain times, best firm management and merger practices, several sessions were of specific interest to auditors. These covered avoiding litigation risks and cybersecurity, along with one featuring an FBI agent expounding on money laundering.

Renowned industry expert on professional liability and litigation, Roy M. Hartman, Esq., attorney with Miami firm, Sacher, Zelman, Hartman, P.A. gave an in-depth analysis with his presentation titled “Avoiding Litigation Risks and Potential Professional Malpractice Claims By (A) Maintaining a Proper Client Acceptance Process and (B) Requiring ALL Clients to Execute a Client Engagement Letter.” While CPAs generally are aware of the needs in this area, the lecture was valuable not only for serving as a reminder of the importance of sound policies, but also for the input from Hartman’s decades of experience working with clients on handling these issues.

The first step in avoiding litigation is to not accept risky clients to begin with. The CPA’s constant drive to bring in new business needs to be tempered with a rigorous policy that uncovers both obvious and more subtle warning signs. Hartman listed a dozen of these, including prior illegal activity, financial problems, poor internal controls, lacking internal stability, uncertain futures, frequently changing or suing accountants, accountant shopping, substantial litigation, substantial related party activity, requiring expertise the CPA does not have, excessive hassling over fees, and generally leaving an uncomfortable feeling (the smell test).

The client acceptance process should employ a comprehensive, formal checklist, considering a variety of internal and external sources, followed by firm approval before acceptance. Rejection letters should be sent to all prospects that do not pass muster. Going forward, the process should also be applied to existing clients regularly. Where problems develop, disengagement letters need to be sent carefully laying out the reasons.

Hartman emphasised that signed engagement letters need to be obtained every year for each separate engagement and for any additional work, clearly laying out scope, conditions and responsibilities. Complete and consistent implementation of formal policies can help reduce the risk of litigation, and potentially lessen the impact if claims occur. Prompt reporting of potential issues to the insurance carrier and seeking the advice of legal counsel are among the other measures mentioned.

The cyber security session featuring industry expert, Roger Grimes from KnowBe4, Inc., was titled Social Engineering & Phishing Attacks – Best Practice Defenses. A common comment heard after his presentation was that attendees were “scared to death” about their exposure to computer hacking in their firms. Interestingly, Grimes emphasized that three common sense measures could reduce substantially the extent of bad experiences in this realm. First, make sure that all the latest patches have been installed for internet-accessible software. Hackers become quickly aware of security weaknesses that are announced for popular software programs. That knowledge gives them time to probe those weaknesses in organizations that have not yet installed the patches that correct the weakness. Second, use multi-factor authentication (MFA) and non-guessable passwords. MFA is not foolproof but is better than just single factor passwords. Third, mitigate social engineering that attempts to cause individuals to reveal confidential information. Strong policies will help, along with ongoing education, such as teaching personnel how to spot rogue URLs.

One of the final speakers was an FBI forensic accountant and CPA whose topic was Follow the Money. Though financial fraud does not have the dramatic appeal of murder and gun battles, accountants can be proud of their place in the FBI for having brought down notorious gangsters like Al Capone, not for murder or corruption, but for tax evasion. The speaker in keeping with FBI confidentiality policy did not provide reference materials, notes or slides for the audience, adding to the agency’s mystique.