ADVERTISER
INDEX
Advertiser
Page
1st global ............................................ 17
accountants World..................... 32, 34, 36
accounting practice Sales ..................... 32
BNa Tax & accounting ........................... 39
CCH, a Wolters Kluwer business.. 7, 25, 40
The Florida Institute of Cpas.................. 31
genovation........................................... 33
growth & profitability Conference...... 18-21
The Illinois Cpa Society ......................... 15
mostad & Christensen .......................... 33
New Clients Inc............................... 34, 35
phoenix phive ....................................... 35
in Congress this November, accounting PACs
are showing few signs of resuming their previous lopsided support for Republicans.
At the same time, during a period when incumbents from both parties are drawing fire
from an angry electorate, political fundraisers
for the accounting profession are showing little interest in supporting challengers for their
seats, in part out of a reluctance to irritate incumbent senators and House members.
That’s not to say political newcomers were
cut off altogether. Republican businessman
Tim Burns received $5,000 from the Deloitte
PAC during his unsuccessful campaign for
the seat of the late Pennsylvania Congressman John Murtha; Massachusetts Republican
Scott Brown collected $1,000 from the American Institute of CPAs’ PAC in his successful
bid for the late Ted Kennedy’s Senate seat;
and Democrat Martha Coakley, who lost to
Brown earlier this year, received $2,500 from
the Ernst & Young PAC.
In each case, however, the non-incumbent
recipient of industry PAC funds was vying for
an already vacant House or Senate seat.
Meanwhile, Tea Party candidates — including Sarah Palin’s “Momma Grizzlies,”
such as California Senate hopeful and former Hewlett Packard CEO Carly Fiorina, and
From page 1
entrusted to the accountant.
In a New York case, accountants were held
liable for aiding and abetting the breach of
fiduciary duty by the board member defendants in view of the plaintiffs’ showing that
the accountants had complete knowledge of
the misuse of condominium funds and were
indispensable to the board member defendants in their efforts to conceal the misuse
of those funds.
In another case, the plaintiff accused his
accountant of falsely certifying that it had
conducted each of its audits in compliance
with generally accepted auditing standards.
This allegation survived the defendant’s
motion to dismiss and the court allowed the
merits of the breach of fiduciary duty claim
to be meted out at trial.
So how is this risk avoided? Sometimes it
cannot be. An accountant may be exposed
to a potential claim for breach of fiduciary
duty even if she acts entirely ethically and
in accordance with law. In other words, it
does not require any criminal or unethical
conduct on the part of an accountant for her
to be sued on a fiduciary theory. Every engagement is unique, and whether the duty
Fiduciary
From page 9
Kentucky Senate hopeful Rand Paul — had
yet to receive a dime from accounting PACs
as of the mid-June filings.
Here’s where the accounting PACs stand
heading into this fall’s elections:
The AICPA: The institute’s PAC has donated $418,353 to federal candidates, with
57 percent of the funds going to Republicans.
Top recipients include GOP House Whip Eric
Cantor of Virginia, and Republican Senate
candidates Roy Blunt of Missouri and Michael
Castle of Delaware, each of whom received
the maximum $10,000 contribution.
Deloitte: The industry’s largest and most
active fundraising organization has so far
contributed $844,000 to congressional hopefuls. Republicans received 54 percent of the
total, with Blunt and Castle each collecting
$10,000 for their Senate races, and an equal
amount going to a number of House candidates, including Republicans Spencer Bachus
of Alabama and Shelley Moore Capito of West
Virginia, and Democrats David Price of North
Carolina and Steny Hoyer of Maryland.
Ernst & Young: E& Y’s PAC made $524,500
in contributions to candidates through mid-June and channeled 60 percent of this money
to Republicans. Among those receiving the
$10,000 maximum from Ernst & Young’s PAC:
Sen. Charles Schumer, D-N. Y., and GOP Senate candidate Rob Portman of Ohio.
PricewaterhouseCoopers: PwC’s PAC
arises is based on the terms of that particular
engagement.
Thus, a practitioner should be keenly
aware of the type of services that are to be
provided. Of course, it’s not advisable for an
accountant to immediately cease serving as
a financial advisor to a client if that relationship has already been established. Often, certain engagements by their very nature will
call for more than the mere preparation of
tax returns. But one should at the very least
stop and consider the engagement and the
risks inherent therein, and, more important,
consider potential risks when a new engagement is entered.
I cannot stress enough the importance of
a written and signed engagement letter that
spells out the exact terms of the accountant/
client relationship. Indeed, whenever a new
assignment arises, even with a long-standing
client, drawing up a fresh engagement letter
is good practice. These letters generally serve
as authoritative evidence as to the scope of
the assignment. In the letter, spell out the
scope of the services to be provided, and stick
to it throughout the engagement. If circum-
stances require the scope be modified, sim-
ply draft a new letter. As a preliminary matter,
a claimant cannot sustain a claim for breach
of fiduciary duty if the accountant did not
doled out more than $1 million to 2010 can-
didates, with Democrats on the receiving end
of nearly half (47 percent). Recipients at the
$10,000 level included Utah’s Republican
Senator Robert Bennett (before he fell vic-
tim to the Tea Party movement), and fellow
GOPers Sen. Mike Crapo of Idaho and Illi-
nois House candidate Judy Biggert, as well as
Democrats Sen. Blanche Lincoln of Arkansas,
and Rep. Brad Ellsworth of Indiana.
