A goldmine of guidance.

• Position: MAP Forum

More lessons learned at the MAP Forum

Guidance on specific ways to cope with the many challenges faced by the accounting profession was offered in several sessions of the Accounting Firm Leadership forum "State of the Profession--Preparing Today for Tomorrow" (see the lead article). Throughout the forum, sessions expanded on the broader topics discussed earlier, addressing them with practical guidance.

Challenging increased risks

Accounting firm liability was the subject of the presentation of lawyers Dan L. Goldwasser, partner in Vedder, Price, Kaufman & Kammholz, New York City, and Scott M. Univer, general counsel, BDO Seidman, LLP, Chicago. They covered a lot of territory, including warning that the insurance market is getting tighter. Goldwasser predicted that reforms will have a dual effect: They will enhance practice, but will create more traps for the unwary. The new reforms will widen the chasm between SEC and non-SEC practice. Consequently, some insurers won't insure SEC practices, policies for SEC practices will be different, and rate differentials will increase.

After outlining the impact of specific reform proposals, Goldwasser offered defensive measures. In general, he thought that firms will have to give up marginal SEC practices or merge, citing partner rotation provisions in the Sarbanes-Oxley Act as a driver of this trend. In addition, because the stakes are going up, firms will have to ensure greater care, select and retain clients more carefully, and put more time and effort into the review process.

"A firm can't be too careful," Goldwasser concluded. The accounting profession is entering a period of high claims. Sarbanes-Oxley has changed the regulatory environment, the Enron-Andersen situation has changed the litigation environment, and the stock market collapse has changed the insurance environment.

Read the law

James Castellano, Immediate Past AICPA Chair, followed Goldwasser and Univer with his "Perspective on the Firm of the Future." One very important message Castellano had for all CPAs concerning the Sarbanes-Oxley Act was "Read the law." Castellano cautioned, "Don't take summaries as the law." Instead, go to the primary source, the text of the law, and look at the definition of the term issuer. This is critical to understanding the implications of the law's applicability to your firm. Castellano also emphasized talking with firm counsel about your connection with issuers.

Castellano offered considerable guidance...