Nebraska law treats accounting malpractice as professional negligence. The Nebraska Supreme Court summarized the elements clearly in Frank v. Lockwood.2 A plaintiff must prove an engagement, breach of a professional duty, causation, and damages. While Frank focused on negligent tax advice, it underscores a foundational issue, which is that a professional duty depends on professional employment. If the engagement exists, so does the duty. The challenge arises when neither party clearly marks the engagement’s end. That line is examined most closely in Colwell v. Mullen,3 where the Nebraska Supreme Court addressed whether a continuing professional relationship extends liability. The Court rejected a broad “always-on” theory and held that tolling of the statute of limitations may only occur when the professional continues providing services for the same or related subject matter after the alleged negligence. Continuity of a general client relationship alone is not enough. For CPAs, this creates both protection and responsibility. Nebraska law will not presume that an accountant owes a continuing duty simply because a client subjectively believes the relationship continues. But when the end of a specific engagement is ambiguous, or when post‑engagement services continue, courts may find that the duty never truly ended. The risks of ambiguity are illustrated by Levy v. Martin,4 an out-of-state case frequently cited in CPA risk-management guidance. There, an accountant prepared tax returns over multiple years but never formally disengaged. When earlier errors later triggered tax liability, the accountant argued that the client’s claims were untimely. The court disagreed. Because the accountant never clearly ended the engagement, the client reasonably believed the CPA remained responsible for tax matters. The professional duty, and malpractice exposure, continued far longer than expected. One lesson is key: Silence is not disengagement. The Journal of Accountancy identifies common indicators that a client relationship has shifted from challenging to dangerous. These include chronic nonpayment, unreasonable pressure to take aggressive tax positions, repeated disputes over fees or scope, lack of management integrity, failure to follow advice, or mistreatment of firm staff. Importantly, the article recommends annual client assessments, ideally soon after the busy season, when interactions are fresh and red flags are most visible. Walking away early is far less risky than disengaging in the shadow of an imminent filing deadline. Many practical disengagement recommendations come from CAMICO (the accounting and auditing professionals group). CAMICO writes professional liability coverage for thousands of firms and maintains a loss‑prevention staff that reviews malpractice claims nationwide. Its guidance reflects not theory, but real claims experience. In its 2025 article, “The Dos and Don’ts of Disengaging,”5 CAMICO emphasizes that client disengagement should be treated as the “continuance” half of the client acceptance and continuance process, a step firms too often neglect. Disengagement is not about being harsh; it is about being clear. Engagement letters define the beginning of professional duty. That same letter — or a separate disengagement letter — may also define its end. An engagement letter may define when the engagement is concluded — for instance, when a certain filing is complete. In that scenario, if the client wants to continue on with the relationship, a new engagement letter or addendum may be prepared. When the end of an engagement is not spelled out on the front-end, a disengagement letter can define the end. When a firm disengages from a client relationship or engagement, firms should do so in a way that reminds clients of existing deadlines in writing, encourages the retention of a new accountant, and cooperates with the transition to a new accountant. Nebraska law does not require CPAs to serve indefinitely. But when the end of an engagement is left to implication, courts will look to conduct, and conduct often speaks louder than intent. Knowing when to say goodbye is a matter of judgment. Knowing how to say it, clearly and decisively, is essential professional risk management. Nick Bjornson and Kristin Krueger are attorneys at Koley Jessen. Nick works closely with businesses and taxpayers on complex tax matters and disputes involving taxing authorities. Kristin serves in the firm’s litigation practice and as Koley Jessen’s general counsel, advising on ethics, professional responsibility and risk management matters. They can be reached at nicholas.bjornson@koleyjessen.com and kristin.krueger@koleyjessen.com. Knowing when to say goodbye is a matter of judgment. Knowing how to say it, clearly and decisively, is essential professional risk management. 1 Amy Waldron, Clients: The End Is Near, J. of Acct. (Mar. 1, 2013), https://www.journalofaccountancy.com/issues/2013/mar/20126599/. 2 Frank v. Lockwood, 275 Neb. 735, 749 N.W.2d 443 (2008). 3 Colwell v. Mullen, 301 Neb. 408, 918 N.W.2d 858 (2018). 4 Levy v. Martin, 463 Mich. 478, 620 N.W.2d 292 (2001). 5 Duncan B. Will, The Dos and Don’ts of Disengaging, CAMICO (Apr. 18, 2025), https://www.camico.com/blog/dos-donts-of-disengaging/. 17 nescpa.org
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