Ethical Concerns For CPAs

As we get ready for tax season, certified public accountants (CPAs) will surely be busy. CPAs have a tough job because they pretty much have to act like an even more advanced version of TurboTax, in that clients expect them to know everything about tax laws and benefits. When they fail to do so, they could get sued by clients.

This is what happened to an accounting firm. It was sued by its client, a California business, that claimed that the firm did not know enough about a federal COVID-related relief program. The business did not inform them of their application deadline, causing them to allegedly suffer $8.5 million in damages.

The business claimed that the accounting firm misrepresented “its expertise and knowledge” and that the business met all the requirements and satisfied all the financial criteria. However, they missed the application deadline because their accountants failed to advise them of it. Therefore, they did not get the funding.

The court dismissed the case, but this still begs a couple questions: First, how much is a CPA expected to know, and second, what are they required to tell clients?

First of all, start by looking at the rules governing your profession, such as the Rules of Professional Conduct. For the most part, if you hold yourself out as knowledgeable in a particular area, you have to be competent. That’s your duty as a CPA. However, competence can take on many forms. The most important thing you can do in this regard is stay on top of changes in the law, which is why there are continuing education requirements. So if you communicate to a client that you can prepare a certain kind of tax return, you need to understand all the related rules and requirements. However, there will be clients who believe that your knowledge or area of expertise is more extensive than it is. Therefore, it is important to set expectations.

Keep Your License With Help From a Tampa Certified Public Accountant Licensing Lawyer

CPAs work with money, so they need to act ethically at all times. But sometimes it can be confusing when it comes to what you should know and what you should tell clients.

A Tampa certified public accountant licensing lawyer from The Law Offices of David P. Rankin, P.A. can assist you with administrative issues. We’ll ensure you don’t jeopardize your career or future. Schedule a consultation by filling out the online form or calling (813) 968-6633.

Source:

news.bloombergtax.com/tax-insights-and-commentary/lawsuit-offers-important-reminders-on-tax-professional-ethics