Risk Mitigation - Engagement Letter Tips For Accountants

The SEC has announced the creation of a new enforcement team focused on auditing-related misconduct, signaling heightened scrutiny of auditors and potential SOX violations.

The SEC Staff has issued new guidance addressing fair value measurement and disclosure practices for private credit and other illiquid assets held by registered funds and business development companies. As private credit portfolios have grown nearly 60% since 2020, reaching $270 billion, regulators emphasize the critical importance of robust valuation methodologies, transparent disclosure of significant judgments, and careful application of accounting standards when market prices are unavailable.

In a July 23, 2026 Memorandum, President Trump announced the final tariff rates for the 60 countries included in USTR’s Section 301 investigation into those countries’ efforts to prohibit importation of goods made with forced labor

The CAS Board has raised contract thresholds to $35 million and eliminated CAS 407, fundamentally changing cost accounting requirements for federal contractors. At the same time, the Department of War is demanding unprecedented cost and pricing transparency through new memoranda requiring actual cost information for negotiations valued at $10 million or more, creating a complex landscape where contractors face fewer formal CAS requirements but heightened scrutiny of their pricing data.

The US National Association of Insurance Commissioners' Statutory Accounting Principles Working Group convened in August 2026 to address critical reforms to the Interest Maintenance Reserve framework...

On August 18, 2026, the Financial Accounting Standards Board (“FASB”) issued a proposed accounting standards update (“ASU”) titled Statement of Cash Flows (Topic 230): Cash Equivalents—Disclosure Enhancement and Evaluation of Certain Digital Assets. The proposed ASU seeks to clarify whether certain digital assets meet the definition of “cash equivalents” on the balance sheet, and to increase the transparency of the significant components of “cash equivalents.”

Finance teams face critical implementation challenges as new GAAP amendments take effect for 2026, requiring immediate attention to accounting policies, documentation standards, and system readiness. Are your financial reporting processes prepared to handle expanded disclosure requirements, CECL practical expedients, and internal-use software accounting changes before year-end audit fieldwork begins?

“Can I safely hire this self-employed person?” This has been a frequent client question in recent years.

An HHS Office of Inspector General audit of Methodist Hospital in San Antonio reveals how a review of just 100 claims led to a $12.4 million overpayment recommendation through statistical extrapolation. The audit targeted specific high-risk billing areas including Inpatient Rehabilitation Facility claims, certain diagnosis-related groups, and outpatient billing patterns, uncovering documentation and coding compliance issues that hospital leadership should examine within their own Medicare claims.

The SEC has established a new Financial Reporting and Accounting Unit within its Division of Enforcement, consolidating nationwide resources to investigate public company accounting and financial reporting issues. This organizational shift signals heightened scrutiny of complex accounting matters, non-GAAP measures, and disclosure practices.

On December 31, 2021, New York Governor Kathy Hochul closed the year by signing into law the Comprehensive Insurance Disclosure Act (S7052) to impose sweeping changes to the rules embodied...

Although being challenged by an injunction filed on August 20, 2026, by a coalition of 17 states, California’s SB 54 Plastic Pollution Prevention and Packaging Producer Responsibility Act is now in effect, and companies that sell, distribute, import, or ship packaged products into California should be evaluating whether they have compliance obligations.

Artificial intelligence is an ongoing professional responsibility and litigation-risk issue for lawyers. The California State Bar recently published new guidance. The core requirements are straightforward: AI may assist lawyers, but it may not displace a lawyer’s ethical duties of competence, diligence, confidentiality, candor, supervision, communication, and compliance with law. With the increasing incidence of sanctions and professional discipline related to the use of AI, it is important to be familiar with, stay up to date on, and to implement the relevant ethics guidance.

In Snyder v. Virginia Mason Medical Center, No. 104136-5 (Wash. Oct. 1, 2026), the Washington Supreme Court held that corporate defense counsel, risk managers, and claims adjusters may not communicate ex parte with a hospital’s former employee health care providers about patient care. The Court reaffirmed Loudon v. Mhyre, 110 Wn.2d 675, 756 P.2d 138 (1988) prohibiting ex parte communication by defense counsel with a plaintiff’s treating physicians, held that prejudice is presumed when Loudon is violated, and ruled that a quality improvement (QI) committee member’s involvement in defense strategy waives the committee’s statutory privilege under Wash. Rev. Code § 70.41.200.

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On September 27, 2026, Governor Gavin Newsom signed Senate Bill 923 (Chapter 482, Statutes of 2026), known as the Expanding Privacy Rights Act. The law amends two provisions of the California Consumer Privacy Act (CCPA): (1) the right to delete (Civil Code § 1798.105); and (2) the methods for submitting consumer requests (Civil Code § 1798.130). The legislation was authored by Senator Josh Becker (D-Menlo Park) and sponsored by the California Privacy Protection Agency (also known as CalPrivacy). This amendment takes effect January 1, 2027.

Humanoid robots are entering American homes at an unprecedented pace, with companies like Figure AI, Unitree, and Tesla deploying AI-powered machines capable of learning and adapting in real time. As these autonomous devices become commonplace, outdated legal frameworks governing product liability, privacy protections, and insurance coverage face mounting pressure to address novel risks ranging from physical injuries to unauthorized biometric data collection.

In late 2025, Figure AI placed its third-generation humanoid robot into homes for alpha testing. The Figure 03 has hands with 16 degrees of freedom...

There are currently 19 states that legally require employers to permit employees (and sometimes former employees) to view and/or obtain a copy of their personnel file. As of November 8, 2026, that number will increase to 20, when New York’s recently enacted Personnel Records Access Law goes into effect. The majority of states have no law requiring access to personnel files and there is no federal law that confers on current or former employees a statutory right to access their personnel files.

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