Provides a valuable trail documenting what steps you took to uncover and consider red flags and other information about your client. Maintains good communication with your client developing a better relationship and more possibilities for cross selling. Understanding the client's business Changes in the clients industry Training staff, etc Most of the information necessary to complete such an evaluation is available on the Internet. The report can be incorporated in your workpapers and provides a framework for completing the type of evaluation we recommend above. Many of the largest tax malpractice claims result from improper or missed elections.
Claims arise from the simple failure of the practitioner to make timely elections.
They also result from a misunderstanding of the client's intentions that lead to an unsatisfactory tax outcome. Documenting all conversations with clients concerning elections, goals and responsibilities so that no misunderstanding can occur. Incorporating information in a formal Engagement Letter or updating existing letters to include any changes in understanding. As fieldwork concludes, do not forget to follow-up on open items and check lists. What may not seem to be important now may very well be detrimental to the defense of an accounting malpractice claim.