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Top risk management tips for ICAEW accountants

**There are many factors for accountants to consider toimprove risk management within their firm but here are some key suggestions forreducing your exposure to professional indemnity claims.**

1.  Issue engagementletters and follow the terms they contain.

2. Confirm all new instructions in writing and keep theclient abreast of the costs. Make it clear what you will advise on and what youwon’t advise on.

3. Record and follow up all advice in writing.

4. Keep clear notes of all key meetings and conversations.

5. Ensure your own diary system is kept up to date and havea centralised diary so that if an employee is absent their work will be pickedup. Missed deadlines are still the cause of many professional indemnity claims.

6. Advise clients of the risks if they fail to meetdeadlines. Missed tax deadlines are a key area of concern.

7. Keep up to date with trends and developments in your areaof expertise.

8. Don’t advise on subjects you are not familiar with.

9. Don’t get too close to your clients as relationshipsquickly fall apart if problems arise. Likewise, ensure you vet all new clients- if a potential client has changed accountants regularly then there is usuallya reason for it.

10. Carry out regular file audits and peer reviews; thisshould be done up to senior partner level.

11. Make sure that there are adequate financial controls inplace. The ICAEW has both a Finance and Management Faculty  and a Financial Services Faculty whichprovide relevant information and reports. Keeping up to date in this area is animportant aspect of good risk management..

12. Have a clear procedure for dealing with conflicts ofinterest.

13. Have clearly defined IT and document managementpolicies. Ask yourself: Do you have adequate security measures in place? Isthere an internet use policy? And are electronic files and memory stickssecured from unauthorised access?

14. Know your professional indemnity policy. The ICAEWwebsite contains copies of the minimum approved policy wordings together withnotes detailing any changes to the minimum wording. Also, be aware of yourclaims reporting obligations under the policy and make sure that all staff areaware of their duty to report potential claims and circumstances which may giverise to a claim.

15. Make sure that the activities you carry out are coveredby your professional indemnity policy. If you are engaging in different areasof business or dealing with clients in foreign jurisdictions make sure thatyour professional indemnity policy will respond if a claim is made against you.

16. Take full advantage of the support provided to you bythe ICAEW. Their website contains a wealth of information on professionalindemnity insurance ranging from providing a list of the participating insurersto what to do if you cease practicing, or need to enter the assigned riskspool. The website also has very detailed notes on managing your exposure toprofessional liability.

Finally, it is worth emphasising how important good riskmanagement is. Dealing with a professional indemnity claim can be costly andtime consuming and most insurers will require you to be actively involved in theprocess. If a claim goes to mediation or trial you could be looking at hundredsof working hours being lost and in this economic climate that is not anappealing prospect.

To find out more about how risk management can help yourbusiness please call **0117 929 3344** or email[enquiry.professions@bluefingroup.co.uk](mailto:enquiry.professions@bluefingroup.co.uk).

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