INTHEBLACK November 2023 - Magazine - Page 25
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AVOID RISKS AND MEET
COMPLEX CLIENT NEEDS
Client needs are increasingly complex. Here’s how accountants can meet them effectively,
without exposing themselves to unnecessary risk.
Accounting is a complex profession
that involves in-depth knowledge on
a wide range of topics and the ability
to stay across constant changes in the
industry. Although clients may come to
accountants expecting them to have all
the answers, there is no one accountant
that does.
Drew Fenton CPA, managing director
at Melbourne-based insurance advisory
firm Fenton Green, says, “When there
is a downturn in the economy, we see
more professional indemnity claims,
maybe because clients are not as
profitable, and if something goes wrong,
they seek compensation.”
“However, we would suggest that
40 per cent of claims are practitioners
giving advice beyond their skill set to
assist their clients,” he says.
KNOW YOUR SKILL SET
Being self-aware is an important skill
for any accountant. “You should know
what areas of accounting you are
knowledgeable in and your level of
experience. This means that you are
prepared for all the risks and have
measures to control them,” says Fenton.
Many accountants are experts in tax and
hold a tax agent’s licence, but that does
not automatically mean that they are
qualified to give specific directions to
every client in every situation.
“For any accounting practice, clients
can vary greatly,” says Fenton. “If we
look at the tax act, there are many taxes
that are very complex – for example,
capital gains tax. For all specific sections
of tax accounting, we suggest tax
practitioners seek assistance.”
AVOID RISKS AND CONSEQUENCES
Stepping outside one’s area of expertise
can have serious negative consequences
for accountants and their clients.
“We have seen significant claims
coming from software companies as
a result of the government trying to
incentivise companies to create software
in Australia,” Fenton says.
“Some general practitioners thought
they could submit the claims themselves,
and it took a long time for the tax
department to do an audit for those
submissions. When they did, they found
errors. As a result, the client had to give
back the funds they had claimed,” he says.
Accountants can be faced with
fines and penalties if they are found to
be negligent, or if clients claim that
their accountant had made an error
which caused the company a serious
financial loss.
PREPARE FOR THE FUTURE
Every accountant wants to be able
to help their clients and answer
their questions. Fenton recommends
accountants listen to their clients goals
and anticipate their future needs,
evaluate how the client’s situation
matches up with their own knowledge
and take appropriate action.
“Pre-emptively go and set up a
referral base for clients that require
specialised skills and advice,”
Fenton says.
He also recommends insurance
protection that covers both clients
and accountants. “From an accounting
perspective, if you hold yourself as an
expert and get money for that, you are
responsible for maintaining
a professional indemnity insurance
which should cover the amount of
A$2 million,” he says.
For more ways to manage risk, head to Fenton Green’s website.
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