Consulting on preventing legal liability of certified public tax accountants
A succession of tax reforms has led to a sharp increase in legal liability of certified public tax accountants, and there is an urgent need to establish a system to limit the risk of liability lawsuits against certified public tax accountants.
Among the many professions, certified public tax accountants are said to be the most likely target of lawsuits. The number of liability lawsuits against certified public tax accountants is increasing each year, and both the number of payments and the amount of payments are on the rise as it is relatively easy to calculate the amount of damages.
Tax offices and certified public tax accountants are encouraged to establish a system that prevents errors in tax return preparation and consulting, while providing beneficial services to clients by fully complying with various tax laws that are frequently revised.
Tokyo Kyodo Risk Management Services Co., Ltd. provides consulting services to tax offices and certified public tax accountants on the prevention of legal liability as well as assisting in the establishment of a system to manage risks of legal liability. We also offer insurance coverage that is wider than that of usual insurance for legal liability of certified public tax accountants, such as insurance that increases the amount of indemnity/fills the difference in terms and conditions.
We diagnose and evaluate the client’s potential risks of legal liability of certified public tax accountants and suggest improvements to make the structure less prone to such risks.
First, we will ask you to answer the questionnaire for the risk assessment, and then we will divide your answers into four categories (advisory contract/relationship with client/organizational development/consulting) and rate them on a 5-point scale from A to E. (We will also give you an overall rating.)
When we review each category from the perspective of preventing legal liability of certified public tax accountants, we will tell you which categories are likely to cause problems, what improvements would reduce such risks, and propose specific improvements to make your office as a whole less prone to legal liability of certified public tax accountants.
If you have other specific matters you would like to consult with us, we will be happy to support you.
■Consulting on preventing legal liability of certified public tax accountants
■Assessment and evaluation of risks of legal liability of certified public tax accountants
We propose to achieve growth by reducing risks with a balance of three factors: loss prevention, loss reduction, and segregation/diversification.
We can also provide support in establishing a risk management system for tax offices.
There are two main methods of risk management for preventing legal liability of certified public tax accountants: risk control and risk financing. Risk control measures include avoidance, loss prevention, loss reduction, and segregation/diversification. Risk avoidance, which means discontinuing the risky activity itself and blocking out expected risks, may be effective as a risk control, but it is an action that conflicts with the expansion of the realms of the tax offices’ business, and may lead to stagnation of the business. Tax offices seeking to grow their business should promote their operation with an awareness of the balance among three risk control measures other than risk avoidance.
There are two means of risk financing: transfer and possession. If you possess the risk, you will need to bear your own costs in the event of incurring a loss, so it is advisable to transfer the risk while recognizing the degree of risk possessed by each tax office and using insurance or other means.
■Organize seminars for staff handling risks of legal liability of certified public tax accountants
■Handling of insurance that increases the amount of indemnity/fills the difference in terms and conditions
Tokyo Kyodo Risk Management Service Co., Ltd.
Representative Director: Ryutaro Uchiyama
Description of business
Services related to life insurance solicitation, etc.
C/O Tokyo Kyodo Accounting Office, 3-1-1 Marunouchi, Chiyoda-ku, Tokyo, Japan
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