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Engagement Agreements: Obtaining Consent to Benchmark Client Data

As firms work with us to implement a benchmarking strategy, we are often asked for examples of how firms obtain consent from their clients.

AdobeStock_81548621As firms work with us to implement a benchmarking strategy, we are often asked for examples of how other CPA firms have obtained consent from their clients as required by the AICPA. Here are a couple of examples of the language that firms have inserted in their Engagement Agreements/Letters. 

Example #1
[Firm] may, at times, use subcontractors to perform services under this agreement, and they may have access to your information and records. Any such subcontractors will be subject to the same restrictions on the use of such information and records as apply to [Firm] under this agreement.

[Firm] may, at times, use third-party software applications to perform services under this agreement. You authorize [Firm] to sign on your behalf any vendor agreements applicable to such software applications. [Firm] can provide a copy of the application agreement at your request. You acknowledge the software vendor may have access to your data.

We regularly aggregate anonymized client data and perform a variety of analyses using that aggregated data. Some of these analyses are published to clients or released publicly. However, we are always careful to preserve the confidentiality of the separate information that we obtain from each client, as required by the AICPA Code of Professional Conduct and various laws. Your acceptance of this engagement letter will serve as your consent to our use of [Client]’s anonymized data in performing and reporting on these cost comparison, performance indicator and/or benchmarking analyses.

Example #2
With your consent, [Firm] will provide [Client]’s financial statement and/or tax return information, consisting of [Client]’s general ledger trial balance for up to five of the [Client]’s most recently-completed year-ends, as well as the [Client]’s North American Industry Classification System (NAICS) code (the “financial information”), to Peerview Data, a third-party financial data analytics company. Peerview Data will add [Client]’s financial information to Peerview Data’s database of industry financial information. To maintain the confidentiality of the [Client]’s financial information, the financial information that we will provide to Peerview Data will not include the [Client]’s name. Peerview Data has informed us that they meet relevant information security requirements and best practices. 

At your option, you may decide to engage [Firm] to compare [Client]’s financial information to the financial information of other organizations in your industry, and to provide [Client] with operational and financial benchmarking and recommendations.

[Client]’s financial information will remain in Peerview Data’s database of industry financial information, and will be averaged with the financial information of other companies in your industry; this averaged industry financial information will be provided to other companies in your industry that use Peerview Data’s service.

While we're not attorneys and don't purport to provide legal or regulatory advice, we know it's helpful to see some examples. Hope this helps you and your team as you implement your strategy.

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About Peerview Data

At Peerview Data, we know you’re under pressure to provide the best advice to your clients. In order to do that you need to be able to leverage your data and put systems in place to support your growing Advisory practice. Here’s the problem: it's difficult to standardize across your firm, not all accountants are natural advisors, data is coming from several different sources, and we're often tasked with using apps that we haven't learned.

That’s why we created software that takes the frustration out of the analysis of historical financial results, provides peer benchmarks and comparative analytics, and gives you tools to consider scenarios and plan for the future. So you can get back to developing client relationships and helping them achieve their desired results. And yours!