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Effective Communication: The Best Medicine to Avoid Litigation?

Professional Liability, Practice Management, Other

A University of Chicago study in the medical profession has suggested that the way a physician communicates with patients has a major impact on whether the patient sues the doctor for malpractice after bad outcomes are experienced. The most important reason a patient sues is not medical negligence but how the doctor talks with the patient. The study suggests that simple things like orienting the patient about what to expect during a visit or being sure information and instructions were understood made the difference.1


There is no question that the CPA faces a different and more complex constituency than the single patient of a medical professional. Nevertheless, perhaps the CPA can also apply the results of this study to public accounting. Certainly in the non-public company environment and in the individual tax service area, it seems that parallel situations may exist.


The "expectations gap" continues to face the accounting profession despite several attempts to close it. This is the case, in part, because of a failure to effectively communicate. Clients may not always understand the scope and limitations of the services they have asked CPAs to provide. CPAs may not explain the services in layman terms. Engagement letters, written in technical language and in a legalistic manner, may not do much to help alleviate the lack of understanding.


What is the answer?


Could it be as simple as meeting with the firm’s clients and communicating in plain language?


Consider the following:

  • Before accepting the engagement, discuss the results of conflict checks with the prospective client. Explain to the prospective client that possible conflict of interest situations may arise during the engagement that do not exist when the engagement is accepted; and the firm will identify conflicts on a ongoing basis and appropriately disclose to the client in determining further actions.
  • Don't just send the engagement letter by e-mail or through the mail. Meet with the client to explain its contents, confirm or clarify the objectives, scope and terms of engagement and any anticipated limitations, billing arrangement, etc. and give the client an opportunity to ask questions. Mutually agree on expectations for service and quality. 
  • Before the work starts, meet with the client and explain the firm’s plan for the engagement. What is the anticipated timetable - when will the work start and when the firm plans to complete? How will it progress? What are the client’s roles and responsibilities? What is the level of assistance (e.g. Information, documentation, access to personnel, etc.) that the firm will require from the client and when?
  • Identify the firm’s Person(s) in Charge (“PIC”) who has the appropriate capacity for the engagement and communicate through the PICs for information requests, inquires, meeting requests, and other engagement related matters. Establish a policy on reviewing and responding to client communications if the PIC is unavailable.
  • Develop a client communication plan that works for the firm and the client. The plan should set out the form, timing and expected general content of communication. For example, schedule recurring weekly meetings with the client to report on the status of the engagement. Provide the client the opportunity to comment on how things are going. Communicate timely any unexpected, special, or unusual circumstances that have been encountered, as well as issues and concerns that require immediate attention from the client. It's easier to address and fix problems if they are identified early.
  • Don't just mail or deliver a tax return or a written report with a transmittal letter. Meet with the client and explain the contents. Ensure the client has sufficient understanding of the work performed, findings, and conclusions reached.
  • Ask the client if the work went satisfactorily. Provide an opportunity for the client to ask questions and comment on the assignment, and promptly respond to client’s inquiries. Keep the lines of verbal communication open.
  • Provide training on effective communication to limit liability and promote customer service excellence. Evaluate the quality of client communications at all levels of responsibility within the firm. Leaders should serve as role models for staff by making effective communication part of the firm’s culture. 
  • Consider how the communication may be perceived by clients or third parties, as oral testimony about discussions or copies of written communications can be used as evidence to support subsequent claims against a firm. Establish firm policy on documenting client communications, and business etiquette in the use of telephones, e-mail and other electronic communication methods. 

Everyone probably has a thousand reasons why some or all of the above suggestions won't work in their particular case. But as one of the researchers in the medical study said, "Competence doesn't stop with the technical."


1 "Bad rapport with patients is to blame for most malpractice suits," University of Chicago Chronicle, February 20, 1997, Vol. 16, No. 11, p. 1.,


Updated March 2012



Accountants Professional Liability Risk Control, CNA, 333 South Wabash Avenue, 39S, Chicago, IL 60604.
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