Risk Alert: Professional Liability Risks Related to COVID-19

At the present time, everyone is in a period of adjustment, focusing on the day-to-day and taking care of immediate issues—family, health and work. CPAs are no different. That said we encourage you to take some time to think about the long-term potential professional liability impact of the current state.

While many businesses and individuals will weather this economic storm, some may be unable to do so. It seems inevitable that there will be some bankruptcies, some calls on credit lines and some loan defaults.

How do these potential events affect a CPA firm’s professional liability risk? When money is lost, often regardless of the circumstance, those who are damaged will seek recourse from wherever they can find it. That recourse is often sought from a trusted advisor, and CPAs can be high on that list.

What can CPAs do now to help mitigate this risk?

  • Be prepared

    • Immediately consider the impact of COVID-19 and whether disclosures or modifications need to be made to the financial statements and/or the CPA firm’s report.​
  • Familiarize yourself with available guidance and resources 

  • Communicate with your client

    • Clients may seek a CPA’s assistance in applying for a small business loan or the client’s lender may request that the CPA confirm certain information about the client in order to extend or modify credit terms. While a CPA’s natural inclination is to help, such assistance is not without professional liability risk. Contact your professional liability insurer who may have resources to assist you. AICPA Professional Liability Insurance Policyholders can contact the CNA Accountants Assistance Line at 800-262-8060 or specialtyriskcontrol@cna.com.

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