Corp client irregularities - CPA liability

[strongsilence]

A corporation client fired the CFO.  Now the CEO wants to discuss these topics, in her words.

1. deficiencies in current accounting practices
2. past bookkeeping errors
3. implementation of financial controls

The CFO and I had worked together on the prior three tax returns (spanning about 4 years). Occasionally the CFO would ask for my advice about GAAP and other general accounting questions (such as accounts payable).  Each time I would remind him that I'm a tax guy with no special expertise in GAAP, or inventory accounting and other topics unique to his industry.

I think this could be a time to call Aon and learn best practices, so I don't implicate myself.  I have nothing to hide. My feeling is that a lawsuit is not in their minds, but who knows.

[strongsilence]

Now is a good time for me to disengage as they need an advisor in accounting and tax.

[IRonMaN · Accepted solution]

I would meet with the CEO to see what the issues really are.  Could be that the deficiencies in accounting practices are the fact that the CFO doesn't really know much about accounting herself but heard some goofy things from her hair stylist.  Bookkeeping errors could be her own thoughts on how revenue should be recognized like recording a sale for something that is ordered today but won't be delivered until July.  Implementation of financial controls could be that she thought the former CFO had too much freedom and she wants to micromanage the position.  Get the feel for the meeting as you go.  If the discussion makes you feel uncomfortable, find an excuse to leave early and go back to your office to figure out a plan B.