When does a CPA firm need a conflict check before a CAM audit engagement?

Run a conflict check before accepting any tenant-side CAM audit engagement. The check should compare the tenant, landlord, property manager, ownership entities, and known related parties against the firm client list, attest client list, advisor relationships, and any financial interests held by firm owners.

Is it a conflict if the CPA firm also serves the landlord?

It may be. If the firm provides attest, tax, advisory, or bookkeeping services to the landlord or a related property entity, the tenant-side CAM audit could impair objectivity or create a confidentiality issue. The firm should evaluate the relationship under the AICPA conflict-of-interest interpretation and obtain informed consent where permitted.

What should a CPA firm disclose before CAM audit work?

Disclosure treatment depends on the service, the client relationship, and state board rules. AICPA professional responsibilities require disclosure of material business relationships to the client. CPA firms should document disclosures in the engagement file and confirm state-specific restrictions before launching a CAM audit service.

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 material business relationship 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 an advisor intro 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 advisor.

Last, business relationships. Note any white-label margin, trade-introduction deal, or other material relationship tied to the work.

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.

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.

Material relationships and disclosures

The AICPA materials stress that you disclose material business relationships. For CAM audit partners, the rule is simple. If the firm has a material relationship that could affect client judgment, tell the client in writing before they buy.

The notice should state who provides the service, who reviews the findings, and whether the client's price changes. It should also say if you run the audit yourself or run the client file through CAMAudit white-label delivery.

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 fee-disclosure expectations.