Conflict-of-interest checks for CPAs offering CAM audit services
CPA firms make good CAM audit partners. They already read reconciliations and sort expenses for clients. A reconciliation is the landlord's year-end true-up of CAM charges. CAM means common area maintenance. The catch is that real estate ties many parties together. The tenant may lease from a landlord you already serve. The property manager may be a bookkeeping client. A firm partner may own part of the center. A referral fee may be in play. This check belongs next to your unauthorized-practice-of-law controls. Both decide if you can take and discuss the work safely.
A conflict check turns those risks into one intake step. It guards your judgment and your clients' privacy. It gives the engagement partner a clear yes or no before you take the work.
This guide is general practice information. It is not legal or ethics advice. Confirm how it applies with your state board, insurer, and counsel.
The conflict map to run before acceptance
Run the check before the proposal goes out. Here is what to find.
Start with the tenant client. Confirm if the tenant is a current client, a prospect, or a referral with no work yet.
Next, the landlord and property owner. Leases often name one party. Invoices may come from a manager or an owning entity. Check the lease, the reconciliation, the W-9, and the payment notes.
Then the property manager. You may do their books, tax, payroll, or advisory work. That can give you private facts you cannot use in the tenant job.
Look at known related parties too. Check owners, funds, franchise affiliates, management firms, and parties named in lease amendments.
Check firm financial interests. Ask if any owner or staff member holds a stake in the property, landlord, tenant, or referral source.
Last, referral-fee links. Note any commission, referral fee, revenue share, or trade-referral deal.
The highest-risk scenarios
The first risk is when you audit or review the landlord. A tenant CAM audit pushes back on what the landlord billed. Is the landlord an attest client? Then treat the job as needing ethics review first. Your independence, your judgment, and private facts can all be at risk.
The second risk is when you do tax returns for both sides. Tax-only ties may work. You still must ask if serving the tenant against the landlord hurts your judgment. It may also expose a client's private facts.
The third risk is when you helped build the lease or the reconciliation. Say you helped the landlord set up the CAM true-up. Reviewing that same setup for a tenant is a self-review risk.
The fourth risk is when the job leans on private landlord facts. The audit should use the tenant's own documents. You cannot use facts from a landlord client unless they allow it and it is proper.
Consent and documentation
Some conflicts are allowed and can be managed. When that is true, get informed consent in writing before you start. The file should show:
- The parties you checked.
- The tie that created the possible conflict.
- The safeguards you used, like separate teams, locked files, or a second partner review.
- The notice you gave the affected client or clients.
- Written consent, when needed.
- A memo on why you took or turned down the work.
Sometimes you cannot tell the client enough to consent. That happens when doing so would reveal another client's private facts. In that case, the safer answer is to decline.
Referral fees and partner economics
The AICPA materials stress that you disclose commissions and referral fees. For CAM audit partners, the rule is simple. Do you get paid when a client buys a scan, an audit package, or a related service? Then tell the client in writing before they buy.
The notice should state who pays the fee. It should show how the fee is figured. It should say if the client's price changes. And it should say if you run the audit yourself or refer the client to CAMAudit.
Source Notes
- AICPA Code of Professional Conduct, ET Section 1.110, Conflicts of Interest.
- AICPA Code of Professional Conduct, ET Section 1.700, Confidential Information.
- AICPA and CIMA, Professional Responsibilities resource, including conflict, confidentiality, and referral-fee disclosure expectations.