Social and Digital Media

Electronic communication has all but replaced traditional means of communication in our lives and work. As a result, we have experienced a great many rewards and time no longer has the same meaning as it once did. Now our thoughts and ideas can be transmitted almost instantaneously. CPA firms have no doubt reaped the benefits of being able to streamline communication between clients and the firm and marketing is facilitated through websites that contain volumes of information that can assist in gaining clients, recruiting talent and promoting the profession.

However, there are also many risks associated with social media and the CPA and firm are not immune to those. Therefore, it is of utmost importance if you as going into public accounting that you are aware of the risks that are involved in using social and digital media to perform your work as well as risks that your personal information could be used against if you were to become involved in litigation. The following are some examples of where you could run into problems:

Increased Risk for Break of Client Confidentiality CPAs are given confidential information, such as W-2s, tax returns, social security numbers, credit and debit card information, in order to do their work. You could unintentionally disseminate this sensitive information to others if you press the wrong button or choose the wrong recipient on an email.

Boasting can threaten Credibility If a CPA firm were to be involved in litigation, an attorney will first seek out the free information that can be found online. If the firm or CPA were to have posted information on Facebook, LinkedIn or some other site that could be shown to be indefensible or inflated, this could be used to call into question the integrity of the firm or CPA.

Independence and Objectivity Issues If an attorney representing shareholders who lost money due to a company presenting false financial information due to fraud can find information to indicate that the CPA lacked objectivity or independence as required for an audit, then that could be used against the CPA in a legal case. Correspondence between a CPA and a client that shows too familiar a relationship, no matter how innocent it may have been, could be used to assert a claim against the CPA for not discovering fraud due to a lack of objectivity or independence.

Discuss some internet and digital policies that would be beneficial for a CPA or a firm to institute to avoid having their employees or the firm encounter the type of problems discussed above.

Discuss your answers to the question at the end of the case with the class. Keep the discussion going all week.

Source - http://www.journalofaccountancy.com/issues/2016/mar/social-media-risks.html?utm_source=mnl:twtcpa&utm_medium=email&utm_campaign=09Mar2016