By Deborah K. Rood, CPA
This article originally appeared in the August 2017 issue of the Journal of Accountancy. Advice provided in this article has been reviewed and remains current.
How a CPA firm portrays itself to the public through its website may be critical to its success. Potential clients generally review firm websites when evaluating and selecting a service provider. Websites often convey a tone that is more marketing- or sales-oriented.
How is the content of a firm's website relevant to professional liability? When the language used to describe the firm, its staff, and its services does not match up with the firm's actual expertise or experience, the defense of a potential professional liability claim may be compromised. Consequently, CPA firms should approach the development of their online presence with the same diligence and professionalism exercised with the delivery of their services.
When creating a website, a CPA firm may use off-the-shelf software with templates designed to streamline the development process and reduce cost. Such templates typically list a broad array of services and innumerable industries, which a firm should customize to its own practice. Or a CPA firm may hire a marketing professional who may not understand the potential professional liability implications of statements made on the firm's website.
For the purposes of demonstration, this article uses theoretical statements that could be found on a CPA firm's website to identify some practices to continue and others to reconsider when creating or maintaining a CPA firm website. EXAGGERATING THE FIRM'S EXPERIENCE The following statements could be interpreted as exaggerating the firm's experience in certain practice areas:
- We offer a full array of services to all of our clients. Below we have listed the services that we offer along with a brief description. This list is not comprehensive! Ask us about a service if you do not see it listed. (The website goes on to describe perhaps 40 services that the four-person CPA firm is able to provide.)
- For our railroad clients, we are recognized as having the best team of professionals in the United States. (This firm has one railroad client.)
statements that exaggerate your education or experience. Reexamine your website and make sure its statements regarding industry and area of practice expertise and experience are current and supported by the firm's practice. The AICPA Professional Liability Insurance Program has experienced claims whereby a CPA's self-characterization as an "expert" has been called into question and used against the CPA by plaintiff attorneys. In these claims, the plaintiff attorney argues that, if the CPA had the expertise described in the firm's website, he or she would have identified important service or industry issues relevant to the engagement. Plaintiff attorneys have used such language to add causes of action for misrepresentation and fraud to their negligence claims.
More significantly, the AICPA Code of Professional Conduct
(AICPA Code) states that a CPA is in violation of the "Acts Discreditable Rule" (ET §1.400.090) if the CPA promotes or markets the CPA's abilities to provide professional services or makes claims about the member's experience or qualifications in a manner that is false, misleading, or deceptive. If a claim arises, a plaintiff's attorney may cite this section in an attempt to discredit the CPA's professionalism and credibility and allege a violation of the AICPA Code. In addition, many states have consumer protection statutes for professionals who have false or misleading advertising, imposing potential civil or criminal enforcement actions.
listing the services and industries in which the firm regularly works. Be honest and focus on the firm's strengths. Emphasize training and experience without "puffing."
using client endorsements or testimonials after obtaining the client's written permission. Actual statements made by current or former clients demonstrate the value of the firm's services and can be more persuasive than a self-serving statement by the CPA firm. STATEMENTS THAT EMPLOY ABSOLUTE TERMS The following statements use words that could be interpreted as implying promises or guarantees regarding the outcomes of services provided:
- We provide all clients with a comprehensive tax planning strategy so you pay the least amount of tax legally possible.
- A senior partner is intimately involved in all aspects of every client engagement.
- With our part-time CFO services, you get an experienced professional who establishes the strongest financial controls for your business to eliminate employee theft and maximize profits.
words that imply an absolute, such as "all," "every," "any," "always," or "constant." These words establish a client's expectation of the services to be provided. In addition, if a claim arises, a plaintiff attorney may contend that the CPA made a false or misleading statement and failed to deliver the service expected by the client. Once again, in the event of a professional liability claim, the client's attorney may allege this was a violation of the "Acts Discreditable Rule" and state consumer protection statutes.
softening the language. Phrases such as "endeavor to" or "our practice generally includes" help to avoid the perception that the firm's statements constitute promises and guarantees. OVERLY BROAD STATEMENTS The following statements indicate, in overly broad terms, that the CPA firm will provide operations oversight or monitoring of the client's business:
- We promise to proactively manage your daily demands and plan for your future goals and needs.
- We will make financial decisions that will allow you to run your business in a highly profitable manner.
statements that hold the firm out as being solely responsible for the client's business. Be careful not to give the impression that the CPA or firm will assume responsibility beyond that for which it is contracted in the engagement letter.
proceeding with caution and using marketing messages to help manage client expectations. CPAs, especially those providing business process outsourcing services, may make decisions within the scope of the engagement and are responsible for identifying issues and providing relevant recommendations for client consideration. CPAs typically advise the client regarding the benefits and drawbacks of various options but, as a general matter, should emphasize that the client is ultimately responsible for the success of its business. IMPLYING INFLUENCE OVER THE CLIENT'S SUCCESS The following statements imply that the auditor or tax professional's work can influence the client's success:
- Our auditors are leaders in providing strategic, financial, business, operational, human resource, tax, administrative, and information technology expertise that has consistently driven the top and bottom line for our clients.
- Want to improve your bottom line? Work with our accounting and tax professionals. Their experience will lead your business to profitability and exceed your business goals.
statements that promise that audit or tax work performed by the CPA firm will positively affect a client's success or profitability. Client performance is based upon numerous variables, and it may be misleading to suggest that many CPA firm services are directly correlated with client success. In the event of a professional liability claim, the client's attorney may assert that this representation reflected a commitment made to the client that the firm was unable to fulfill.
using client testimonials to support how recommendations or services provided by the CPA firm assisted them in achieving desired business results. These declarations can describe the impact of CPA firm services and prove beneficial. FINAL TIPS Reconsider
statements that may be construed as professional advice on the website. CPA firms provide advice based upon client-specific facts and assumptions.
designating individuals to review and update website information often, ensuring that all content remains current, accurate, and relevant. This protocol also helps with search engine optimization.
applying the concepts discussed here to other marketing materials and proposals, including those in print, social media, blogs, and any other format.
remembering that in the event of a professional liability claim, the defense of the CPA firm may be more difficult if the CPA did not deliver on the promises made in a website statement.
Deborah K. Rood is a risk control consulting director at CNA. For more information about this article, contact firstname.lastname@example.org.
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