Help me understand my professional risk
In addition to mitigating exposure to cash risks such as limiting unrecoverable work in progress or debtor balances or expending additional unrecoverable time on helping your client, there can also be a significant professional reputation risk or even negligence exposure should you try to help your client but fall foul of the technical insolvency laws.
These are just some examples. The general rule of thumb should be that insolvency law is very specialist and it is a dangerous area to give advice unless you are up to date with the latest statute and case law interpretations.
Stay clear of choppy waters
We have, on a number of occasions, seen accountants in difficulty when advising directors of companies and the common areas include:
- Incorrect advise regarding asset disposals
- Directors seeking to rely on advice given piece-meal, whilst not considering the wider picture
- Misunderstood wrongful trading advice
- Reuse of a company or trading name or even something similar which can have financial and criminal consequences for the unwary
- Poor record keeping in relation to advice given ‘on the hoof’