When an accounting firm receives a subpoena for information, it is important that the firm follows the law. It needs to make sure that it responds appropriately to the subpoena and protects itself as well as their client’s rights. Accounting firms possess many types of client records and requests for this information can come from many places.
Receiving a subpoena usually raises the blood pressure. Respond to it promptly. Not responding or responding late can put you in contempt of court. Just because you received a subpoena does not mean that you did anything wrong. Nor does it mean in of itself that you are about to get an errors & omissions claim.
The following steps should help you to respond to a subpoena:
1. First consult with an attorney before contacting the client or responding to the request. This will ensure that any limitations on sharing of information are fully understood and addressed.
2. Remember not all subpoenas are valid. Your attorney can ensure that the request is proper and enforceable before you respond to an invalid subpoena.
3. Always report the subpoena to your professional liability insurer. Even though there may be no malpractice claim, it puts the insurer on notice as to the potential incident. This can protect your insurance coverage rights in the future.
4. Your attorney will identify where the subpoena came from and determine the rules and laws that apply. The firm and attorney should also determine which records are covered in the subpoena.
5. After consulting your attorney, the firm should attempt to gather the pertinent information. Review the request carefully and assess whether the firm is in fact in possession of the requested information.
6. Notify your client about the subpoenaed information and inform them of the request.
7. Do not volunteer any information not requested. Providing data outside the scope of the subpoena could violate the Internal Revenue Code, ethics, and/or other privacy acts. It could set the firm up for a malpractice claim.
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Lee Norcross, MBA, CPCU
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