Risk Management Plan Assignment Example | Topics and Well Written Essays - 500 words - 1

Risk Management Plan - Assignment Example regarding legal risks; reputation damage, firm position, claims from third parties due to tax schemes, contractual risks and regulations and policy changes. Legal risk management for accounting firms should start with an engagement letter that contains terms of business, scope of work, and a reasonable liability cap. Engagement letters ensures the identity of all the contracting parties that rely on accountants work. This letters are important to the firm to reduce the amount of claims from third parties in the company. There are also different policies and regulations that govern the accounting firms; Ontario requires that all certified general accountants should have a mandatory errors and omissions insurance (Buchan, et al., 2012). These policies can change with time and this poses as risk to the company. A legal risk management framework is advised to ensure that the organisation will pursue its corporate objectives and aims within its legal obligations for example, legislation, codes of practice, and significant contracts. Compliance with auditing standards has to be followed in accordance with the Auditing Practices Board. Training of employees and proper planning of the work is therefore essential. The relationship between the accounting firm and the entity being audited maybe the source of audit failure to detect issues in audit (Buchan, et al., 2012). Training of employees should be thorough to allow them to pick up the warning signs for example, unexplained debts, late information provision and risk management lack in an entity. Failure to incorporate such information in audits may lead to the closure of the firm. Audit software packages should be revised on yearly basis and professional sceptism should be maintained when carrying out an audit. In reference to insurance, indemnities and warranties should be well considered to avoid catastrophic claims against the accountant professional. It should be ensured that the indemnity clause is well capped