RISK MANAGEMENT RESOURCE GUIDE

Transcription

1 RISK MANAGEMENT RESOURCE GUIDE A COMPLETE GUIDE TO CAMICO S RISK MANAGEMENT SERVICES

2 CAMICO S RISK MANAGEMENT SERVICES AND YOUR FIRM Today, CAMICO focuses on risk management for CPAs through discussion, risk assessment and action. CAMICO s experience and claims data indicate that the more familiar CPAs become with risk management techniques, the better equipped they are to avert a liability claim. Today s CPAs practice in a litigious environment and, as the profession evolves and expands, CAMICO believes those CPAs who are equipped to respond in an innovative way to change will be the leaders. CAMICO s goal is to provide risk management services and products to help CPAs adapt to a more volatile marketplace so that they can grow their practices to be even more successful. In times of growth and practice expansion, CAMICO keeps an eye to the future. We stay in step with the profession, helping our policyholders maintain current protection for their practices with leading-edge practice and risk management tools. Please refer to the individual fact sheets for detailed information on each facet of our risk management service: Education and Training Suggested Topics for Presentations Loss Prevention Hotline Tax Advice and Accounting and Auditing Hotlines Subpoena and Consultation Services Practice Management Tools Claims Handling Process CAMICO Members-only Site Speaker Biographies

3 EDUCATION AND TRAINING CAMICO provides access to in-depth training to CPAs on issues of significance to the profession in today s environment. CPAs can receive training and continuing professional education through a number of free CAMICO educational opportunities as indicated below. Our CAMICO-sponsored group-live educational programs are designed for the basic skill level with no prerequisites required. The learning objectives for our educational programs are primarily focused on enhancing awareness of some of the legal and professional challenges facing the accounting profession. The CAMICO programs highlight risk management skills and techniques that CPAs should consider. Because of the educational nature of the topics that CAMICO presents, CPAs who attend risk management events sponsored by CAMICO can receive one hour of CPE credit for every 50 minutes of presentation material. CAMICO is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of the individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, or by visiting the website For more information regarding administrative policies such as cancellation, complaints and/or refund, please contact CAMICO at However, if a program is offered free of charge, there will be no refunds issued. In addition to the educational opportunities highlighted below, CAMICO maintains a watchful involvement in topical events that impact the profession, publishing articles and informational pieces on issues of importance to CPAs. In-Firm Presentations In-firm presentations are provided exclusively to CAMICO policyholders. The in-firm presentation will train your entire staff and grant CPE credits, all compliments of CAMICO. A minimum of 25 people is required to schedule a presentation, which usually lasts two hours and qualifies for two hours of CPE. We will also schedule a broadcast of a previously taped loss prevention webcast for audiences of people. Webcasts offer one to two hours of CPE, depending on their duration. Our in-firm presentations focus on the latest practice and risk management trends for CPAs, and include a variety of topics ranging from client screening to disengagement. CAMICO will also consider tailoring a special presentation to address your firm s specific needs or concerns. Our introductory in-firm presentation is designed to give you and your staff insight into various risks and CPA practice management techniques. Thereafter, you may want to schedule an advanced level presentation that would concentrate more intensely on specific areas of your choice. Your firm members can decide what practice or risk management topic would be of most interest to them, or we can help you choose a topic that will assist you in getting the most out of your future risk management efforts. Risk Management Conferences and Boosters CAMICO s focus on liability research and education has led to the development of many innovative risk management programs. Periodically, CAMICO holds risk management conferences and/or boosters, which are a quick and convenient way to update policyholders on the state of the profession and CPA liability. Speakers Bureau CAMICO s Speakers Bureau program has been providing speakers for state CPA society chapters, discussion groups, committees, conferences and other groups since A minimum of 50 people is required to schedule a presentation. Through CAMICO s Speakers Bureau program, accounting professionals can benefit from the expertise CAMICO has developed over the years.

4 Webcasts and Online Risk Management Courses In our ongoing efforts to offer policyholders cutting-edge educational tools, we provide access to online risk management webcasts and self-study courses. CAMICO is partnering with LearnLive, a leading provider of e-learning solutions, to provide both interactive webcasts and ondemand courses. The webcasts allow participants to ask questions and get live answers directly from risk management experts who bring together years of experience on some of the legal and professional challenges facing accounting professionals today. The ondemand courses are offered as self-learning tutorials and provide periodic quizzes throughout. Both formats offer policyholders free, NASBA-accredited CPE options. Policyholders can access these free offerings from the Education and Training tab on the CAMICO Members-only site ( LearnLive complies with NASBA standards for webcasts and rebroadcasts to certify Group Internet Based Live CPE. These requirements include meeting the maximum state requirements for tracking with at least four participation markers per hour and a 75% minimum for passing. LearnLive CPE webcasts also include access to a subject matter expert to address questions regarding the program content. Please note, your State Board of Accountancy will make the final determination with respect to continuing education credit. As a CAMICO firm, you will save several hundred dollars per firm member by taking advantage of these free educational opportunities. Benefits of Participating in CAMICO s Educational Opportunities Include: Keeping current with tools and techniques that help you improve your practice and risk management. Hearing war stories from our claims files and learning how to avoid the liability problems other CPAs have encountered. Sharing the results of CAMICO s research and experience through a professional speaker at no cost to your group. To Reserve a Speaker If you are interested in scheduling a presentation, call us toll-free at Contact Information Telephone: Fax: lp@camico.com

5 SUGGESTED TOPICS FOR PRESENTATIONS Standard or Custom Presentations CAMICO s educational programs offer a wide variety of presentations in the areas of risk management, practice management and professional liability. Our speakers provide expert advice on the wide range of concerns and issues pertinent to today s CPA. Our CAMICO-sponsored group-live educational programs are designed for the basic skill level with no prerequisites required. The learning objectives for our educational programs are primarily focused on enhancing awareness of some of the legal and professional challenges facing the accounting profession. The CAMICO programs highlight risk management skills and techniques that CPAs should consider. In addition to the following suggested topics, CAMICO may also consider tailoring a special presentation to address the specific needs and concerns of your group. Because of the educational nature of the topics that CAMICO presents, CPAs who attend a CAMICOsponsored event may receive one hour of CPE credit for every 50 minutes of presentation material. The recommended CPE credit for each of the following group-live presentations is two hours: General Risk Management: Protecting Your Practice Features basic risk management topics with a claims update and an interactive session of either a case study or a short video. This presentation is designed for a firm s first presentation or a general update. Challenges Facing Accounting Professionals...The Past, The Present and The Future This presentation is designed to raise your level of awareness of some of the challenges facing the accounting profession. It will cover risk management skills and techniques that every CPA should consider in light of the current legal and professional environment. The Power of Documentation How to document an exceptional paper trail from start to finish. Documentation is still one of the firm s most powerful forms of risk management. This presentation will include engagement and disengagement letter techniques as well as some do s and don ts related to effective documentation. Active Ethics: How Doing the Right Thing Helps Everyone CPAs have a responsibility to conform to the rules of professional conduct. However, it is important to understand in today s environment how adhering to the profession s ethical responsibilities might sometimes place you in the middle of a potential liability problem. This presentation will identify some of these situations and how to successfully navigate through them. Risk Management and The Emerging Profession: Risks and Rewards Learn what you need to know about emerging accounting and consulting services with a risk management twist. This presentation will cover the six-step process in assessing new services and/or new clients. Fraud and Embezzlement: Risk Management Strategies Learn techniques that will help make your clients, not you, responsible for detecting fraud! This presentation will discuss actions that CPAs can perform to help clients address their responsibilities while minimizing the risks. A CPA s Guide to Avoiding Trouble In this presentation you will learn the anatomy of a claim and how claims affect CPAs in tangible and intangible ways. You will hear about the jury s view regarding the duties and responsibilities of the CPA, and how these differ from professional standards. And finally, you will discover risk management techniques to protect your firm and better serve clients in light of the current legal and professional environment. Additional topics can be tailored to meet the specific needs of your group.

6 Get More Than Just a Speech CAMICO draws upon a pool of trained specialists, most of whom are CPAs, with a wide range of professional and academic experience. Our instructors have backgrounds in both public accounting and private industry, and bring firsthand knowledge of the daily workings of a CPA practice. Speakers include loss prevention specialists, underwriters, and claims specialists, among other experts. To Reserve a Speaker If you are interested in scheduling a presentation, please call us toll-free at Contact Information Telephone: Fax: lp@camico.com

7 LOSS PREVENTION HOTLINE CAMICO makes available to callers the resources of professional advisors who deal exclusively with the concerns and issues facing CPAs. The loss prevention team includes loss prevention specialists familiar with the profession and the daily running of a practice, and tax specialists who advise policyholders on complex federal tax matters. These specialists are professional liability and public accounting professionals with the knowledge, skill and commitment to help CPAs with practice and risk management issues. As the demand for the hotline has grown, especially concerning tax matters, CAMICO has broadened its expertise. Our loss prevention specialists have an average of 15 years of experience in risk management and over 20 years of experience in public and private practice. Over 50 percent of the claims CAMICO sees are tax-related. The CPAs involved could have avoided many of the mistakes if they had sought more technical guidance or information. Our tax specialists are on hand to help policyholders gain an understanding of the federal tax issues and potential problems associated with high-risk estate, gift and corporate tax work, which bring about the most severe claims. CAMICO provides guidance to CPAs engaged in attest services. Areas of advice include statements on auditing standards, statements on standards for accounting and review services, going concern issues, code of professional conduct, independence, conflicts of interest, and quality control standards. CAMICO has specialists available to help policyholders with a variety of general risk management topics including, but not limited to, the following: Accounting and auditing advice Arbitration/mediation Bankruptcy Client screening Conflict of interest Coverage Disengagement issues Divorce situations Documentation Engagement and disengagement letters Fees, billing and collections Fraud and defalcation Internal control Per diem work Privacy Recall of work Retention of files Subpoenas/summonses Technical tax advice CAMICO also performs letter review services for policyholders. Examples include engagement and disengagement letters to clients and some agreements. Faxed letters sent to CAMICO for review should be addressed to the Loss Prevention Department. There is no need to call in advance. You can also letters in Microsoft Word format to lp@camico.com. Employment Practices Support Service CAMICO provides policyholders that have Employment Practices Liability Insurance (EPLI) with access to unlimited telephone and consulting services in the employment practices and human resources areas. You will also have access to comprehensive Webbased tools such as information on employment laws, forms, an employment handbook constructor tool, job descriptions, and much more. We at CAMICO believe in the value of our risk management services, and we strongly encourage policyholders and/or agents, on behalf of policyholders, to take advantage of these free services. For more information, call CAMICO s Loss Prevention Department at Contact Information Telephone: Fax: lp@camico.com

8 TAX ADVICE AND ACCOUNTING AND AUDITING HOTLINES Accounting and Auditing Advice Hotline Services include: Providing guidance regarding a variety of accounting and auditing issues, including statements on auditing standards, statements on standards for accounting and review services, going concern issues, code of professional conduct, independence, conflicts of interest, and quality control standards. Tax Advice Hotline Over 50 percent of the claims CAMICO sees are tax-related and CAMICO has determined that certain tax areas present greater liability risks. Our tax specialist is on hand to help policyholders gain an understanding of the federal tax issues and potential problems associated with high-risk estate, gift and corporate tax work, which bring about the most severe claims. Reduce Your Risk Your tax practice exposes your firm to significant risk. After studying years worth of tax claims, CAMICO has determined that certain tax areas present greater liability risk to CPAs than do others. In order to help policyholders reduce their exposure in these high-risk areas, CAMICO offers a cost-free tax advisory hotline. Please note that this service is designed to supplement your research and knowledge in the given tax area. It is not intended to replace your research, decision-making or responsibilities related to return preparation. How It Works The tax areas covered are listed below. CAMICO provides tax hotline service in the following two formats: Cold Review Format When you request a cold review, CAMICO will review your firm s fully researched tax treatment of a given complex transaction. After completing this review, CAMICO will confer with you about the proposed treatment, suggest any possible alternate treatments and highlight other tax issues relative to the facts provided. Guidance Format When you request tax guidance, CAMICO will assist you in determining the tax issues presented by your particular fact pattern. CAMICO will also discuss applicable Internal Revenue Code sections, revenue rulings, cases and other tax research materials that can serve as a springboard for further research by your firm. List of Tax Areas Covered Complex Corporate Issues Corporate Formations 351, 357, 358, 362 Reorganizations Acquisitive, Divisive Carryovers of Corporate Attributes after Reorganizations 381, 382 Corporate Sale/Purchase Issues Stock vs. Asset Sales/Acquisitions Income from Discharge of Indebtedness and Exclusion under 108 Net Operating Loss Carryover Provisions, 382 Liquidations 331, 332, 334, 336, 337

9 Like-Kind Exchanges and Involuntary Conversions 1031, 1033 S-Corporation Issues Alternative Minimum Tax Issues International Tax Issues Affiliated Foreign Corporations/Foreign Ownership of U.S. Corporations Accounting Method Changes Preparation of Forms 1120, U.S. Corporation Income Tax Return Estate Tax Issues What Is Included in the Gross Estate 2031 Alternate Valuation 2032 Estate Tax Deductions, Especially the 2056(b)(7) QTIP Election and Related Issues Estate Tax Freezes Computing the Estate Tax/Unified Credit Generation Skipping Transfer Tax (GSTT) Estate Tax Planning Issues Related to Exemption and Marital Trusts Preparation of Federal Form 706, United States Estate (and Generation Skipping Transfer) Tax Gift Tax Issues Taxable Transfers Gift Splitting 2513 Transfers Excluded and Exempted from the Gift Tax Gift Tax Deductions, Especially the 2523(f) QTIP Election and Related Issues Calculation of the Gift Tax/Unified Credit Preparation of Federal Form 709, United States Gift (and Generation Skipping Transfer) Tax Contact Information Telephone: Fax:

10 SUBPOENA AND CONSULTATION SERVICES CAMICO offers its policyholders a comprehensive range of subpoena and consultation services. These services are designed to assist policyholders in reducing the risk of claims and litigation and to guide them through the legal process when they are not a party in the litigation. Our knowledgeable staff of professionals and experts have many years of experience advising CPAs in a variety of legal issues. Subpoena Services CAMICO provides comprehensive assistance to policyholders when responding to the legal process. Through this service CAMICO's appointed counsel may assist policyholders when: Interfacing with attorneys. Coordinating and possibly limiting production of records, including engagement files and workpapers. Defending the CPA in and preparing for depositions and pre-deposition interviews/meetings and IRS/CID and regulatory interviews and investigations. Preparing for pre-trial and pre-grand jury testimony. The types of subpoenas and other matters for which this service is provided include: Civil Subpoenas Assist and represent policyholders in responding to requests and legal process including, but not limited to, civil subpoenas (usually the client or third party is a litigant). These kinds of subpoenas are commonly seen in litigation arising out of business disputes, bankruptcy, estate, trust, divorce and employment matters. - Discovery (deposition and/or document production) - Trial (testimony and/or document production) Criminal or Grand Jury Matters Provide counsel in connection with responses to criminal and grand jury subpoenas (for government inquiry and investigations relating to the policyholder s client as a criminal subject). Regulatory Aid policyholders in matters relating to regulatory requests for information (including SEC, Department of Labor or any other state or federal agency inquiry; search warrants). Third-Party Requests for Information Including pertaining to a pending legal dispute or inquiry by an interested party or counsel regarding client matters. Some of the benefits of the subpoena service include: Early detection of potential policyholder risk exposure arising out of the underlying engagement Provides education/awareness and risk management tools to policyholders Provides cost savings for policyholders Consultation Services This service provides comprehensive advisory assistance to policyholders by seasoned legal professionals on a variety of sensitive client matters affecting the profession and practice management, including: Engagement and disengagement issues Third-party requests for information Responses to legal process, subpoenas, regulatory inquiries and requests, and miscellaneous matters

11 Some of the benefits of using consultation services include: Enhanced policyholder knowledge regarding the impact of practice management decisions Reduction of policyholder risk/loss by implementation of effective practice management tools Assistance with safely promoting firm growth and expansion Contact Information Telephone: Fax:

12 PRACTICE MANAGEMENT TOOLS Over the years, CAMICO has established a reputation as an industry leader. We offer exceptional support and an array of innovative tools and techniques designed to help CPAs better protect themselves against professional liability claims. CAMICO is actively involved in researching and developing services and products that fit the needs of the profession, always keeping a finger on the pulse of current issues and trends. The practice management tools offered by CAMICO are individual pieces that, when used in concert, provide an extensive support system for the CPA seeking protection from liability. By incorporating these tools into everyday practice habits, CPAs lessen the odds of being targeted in a lawsuit, while growing and improving their business. Risk Management Resource Library on the CAMICO Members-only Site Our Members-only site ( contains an extensive array of information and covers practice issues ranging from engagement letters and client screening to fee collection and proper disengaging. For more information on CAMICO s Membersonly site, please refer to the CAMICO Members-only site tab. Documentation Tips and Notepad A quick-reference fact sheet that contains the essentials of good documentation, along with a pad of preprinted forms, allowing you to easily record client decisions, conversations and meetings in an organized fashion. The documentation pad is also available as a fillable PDF form on the CAMICO Members-only site. Claims Trends and Analysis Find out the latest trends in risky practice areas analyzed in terms of frequency and dollar severity. Prospective Client Investigation Receive client screening and investigative services designed to fit your particular needs from Scherzer International an invaluable client screening tool in today s business environment. For more information on the various levels of services provided by Scherzer International, visit Engagement/Disengagement/Third-Party Reliance Letters Engagement letters, disengagement letters and third-party reliance letters are drafted specifically to protect CPAs through definition of scope and assignment of responsibility. CPAs finding themselves at a loss for words can rely on our sample letters. Risk Management Materials The Loss Prevention Department maintains a library of accounting and risk management materials that policyholders can access on the CAMICO Members-only site. These items include letters to clients, checklists, articles and war stories. IMPACT Newsletter/Trade Journal Articles IMPACT is CAMICO's quarterly newsletter that focuses primarily on practice and risk management issues. It is ed to member firms and archived copies are available on the Member Site. Additionally, look for the various articles and editorials we regularly contribute to such industry trade publications as The Journal of Accountancy and The Practical Accountant. CPA s Guide to Effective Engagement Letters (CCH Publishers, Inc.) CAMICO has updated the best seller, CPA s Guide to Effective Engagement Letters, co-authored by CAMICO s own Ron Klein, J.D.; Ric Rosario, CPA; and Suzanne M. Holl, CPA. This book provides the tools you need to create effective engagement letters and is composed primarily of annotated parts of an engagement letter, which you can piece together to create an entire engagement letter. The book includes actual letters that you can customize for your own purposes. CAMICO policyholders can purchase this book at a significant discount. Contact Information Telephone: Fax: lp@camico.com

13 CLAIMS HANDLING PROCESS The Claims Department s strategy toward claims handling includes a proactive approach and a strong emphasis on risk management. Our team of well-trained claims specialists, most of whom hold law degrees, possesses many years of experience in the handling of accountants professional liability claims. To date, the specialists have used their expertise in managing more than 15,000 incidents that could have led to claims. On an average, our hotlines receive more than 750 calls from policyholders each month, one-third of which concern problems that have the potential to become claims. To quantify CAMICO s claims experience, nearly 100 characteristics of each claim are collected and analyzed in our sophisticated policy management computer system. This data provides CAMICO with better underwriting procedures, timely actuarial information and effective claims management. Additionally, information concerning the causes of claims can be determined and addressed by developing appropriate risk management techniques. There are three basic steps that are followed when handling claims: 1. General Philosophy and Approach Consistent with the company s mission, the claims function at CAMICO solves professional liability problems for the insured in a way that balances the interests of each insured and the company. CAMICO s goal is to treat all insureds and claimants fairly and equally so that claim problems are resolved efficiently and expeditiously. Every claim is an opportunity to demonstrate to the insured CAMICO s superior services, expertise and personal approach. 2. Early Intervention, Evaluation and Resolution Problems are best solved if they can be identified and addressed as early as possible, often even before they are at the claims stage. This requires motivating insureds to notify CAMICO early on, so that we can provide timely and meaningful services and assistance. Insureds will not be penalized for early notification. As a CAMICO policyholder there simply is no reason for not calling our hotlines to report circumstances likely to give rise to a claim. Such early reporting protects your rights under the policy and may qualify you for a reduction in your deductible. CAMICO does not surcharge for claims or potential claims, so early reporting will not increase your premium. Most importantly, we may be able to help you avoid or minimize a claim. Often before early intervention occurs, an evaluation of the problem and potential solution needs to be completed. This evaluation may lead, if appropriate, to attempts at early resolution of the matter through a variety of means, including settlement with a claimant, repair work on behalf of a claimant or other appropriate means. Claims are handled by a team including the insured, the CAMICO representative, and external attorneys and consultants. The CAMICO representative is responsible for coordinating the efforts of the team members and making strategic decisions after seeking the advice of the other team members. The CAMICO representative will consult with the team and insured before making any offers or negotiating settlements. When the insured has not committed an error and there is no exposure, the costs of providing a defense are not used to justify a loss payment. Early action minimizes the impact of professional liability problems on the insured and leads to better claims results. 3. A Focused and Active Defense The defense of claims is done in a focused manner. Upfront analysis results in the development and implementation of a plan to resolve the matter. Periodically, the plan is reviewed and modified, as necessary. While there are occasional exceptions, defense efforts are proactive rather than passive and reactionary. This is especially true for litigated matters.

14 CAMICO MEMBERS-ONLY SITE As part of CAMICO s ongoing efforts to deliver timely practice and risk management services as efficiently as possible, CAMICO offers all members exclusive access to the password-protected Members-only site ( The site offers a suite of resources, products, advice and tools that CPA policyholders can immediately download and apply to solve problems and avoid making costly mistakes. The CAMICO Members-only site includes: A comprehensive Knowledge Tree organized into easy-to-use folders by scope of service and area of risk: Risk Management covers CPA professional liability issues and topics such as fraud, client screening and record retention Scope of Service covers a dozen service categories ranging from tax, to litigation support, to attest services CAMICO Partnerships provides policyholders with valuable resources often at discounted prices CAMICO Publications includes recent and archived issues of the quarterly newsletter IMPACT Alert Documents contains documents and articles frequently requested by policyholders; topics range from outsourcing to current tax issues Resource Centers on major topics such as accounting and auditing, economic downturn, engagement letters, fraud, ID theft/data security, subpoena services and tax, enabling members to quickly access information, tools and other resources related to a particular topic Education and Training opportunities through webcasts, podcasts, self-study courses, in-firm presentations and other free CPE offerings The Members-only site homepage also features current e-alerts on urgent topics pertaining to CPA practices, as well as CAMICO news, upcoming events, and current IMPACT newsletters. Other elements of the Members-only site will be customized for each CAMICO policyholder according to the policyholder s profile. For example: HR Support will be accessible for policyholders who have CAMICO s Employment Practices Liability insurance My Policy will enable smaller firm policyholders to access details of their insurance coverage and to submit policy renewal applications online Questions, comments and other feedback are easy to submit on the site. Simply go to the Question or Comment feature located in the lower right corner of the homepage and most other pages. Contact Information Telephone: Fax: lp@camico.com