While potential "conflict of interest" issues often arise because of married clients getting a divorce, other types of "splits" that may involve a dispute among shareholders, LLC members, partners and beneficiaries also present potential conflict-of-interest situations. The latter scenario many times is more complex than a divorce because it involves more people, some of whom the firm may represent individually while also representing the entity. CPAs must ensure that they comply with the AICPA's Code of Professional Conduct ("Code") for addressing Conflicts of Interest [ET 1.110.010].
Some CPAs believe that they will never be sued and therefore believe they do not need professional liability or other forms of insurance. The reasons for this position vary, but some common ones include, "I don't make mistakes," "All of my clients are friends," or "I do tax work only." The problem with this approach is that it is not effective risk management and could put even the most cautious CPA firm at risk.