The termination of services, a seemingly benign event, can be the prelude to a claim for professional negligence. The New Jersey State Board of Accountancy’s Rules of Professional Conduct, embodied in the New Jersey Administrative Code at N.J.A.C. 13:29-3.1 to 19, set forth the parameters that govern an accountant’s duties and obligations to clients in response to a request for a return of the “client’s” records. See N.J.A.C. 13:29-3.16.
In situations where clients end the professional relationship with their accountant, it is natural for one to focus their attention on the topic of most immediate concern—”have I been fully paid, and will I be paid.” While attention to accounts-receivable is an appropriate business and file transfer consideration, the main focus of attention must be risk management with full consideration of the State Board’s Rules of Professional Conduct as part of the task of collecting the client’s file and preparing documents to be produced or returned to the client. If ignored or intentionally disregarded, instead of receiving an envelope with a check for fees, a CPA could wind up receiving an envelope delivered by a process server which begins: “The plaintiff, named above, has filed a lawsuit against you ….”
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