Chapter 22: Professional Services:
Professional: someone engaged in an occupation, usually governed by a
professional body requiring the exercise of specialized knowledge, education, and
skill
Professional services: supplied in-house or contracted out to private firms
Whether professional is an employee or an independent supplier of a service,
that person owes responsibilities to the business
Ethical Obligations:
Professionals retaining membership in their profession continue to be bound
by the rules of professional conduct and codes of ethics of their professional
bodies
Dilemmas tend to arise when business is under stress
If rules violated, then they are breaching their own professional
responsibilities and risk sanction
Hiring in house Professionals:
If cost of external professional services for a business becomes significant,
the business will likely consider the employment options
When making this decision make sure all costs, quantative and qualatitve are
being incorporated
Responsibilities of professionals to clients and others who rely on them:
Owe tort duties- mostly from those arising from negligence
Owe fiduciary responsibilities to their clients
Responsibilities defined in contract (timeline of delivery, how fees will be
billed, etc)
Retainer: an advance payment requested by a professional from a client to
fund services to be provided to the client
Contracts: how will fees be charged? What expertise is required for the
work? Do both parties understand the nature of the work to be performed
and the likely results? When should it be completed by? How often will they
stay in contact? How will disputes me handled? How is risk allocated?
Quantrum meruit: the professional provides an appropriate level of service,
and the client pays a reasonable amount for that service (if contract price not
stated)
Fiduciary Responsibilities:
Professionals act in a fiduciary capacity and are deemed by law to owe duties
of loyalty, trust and confidence that go beyond those contractual or tort
responsibilities owed by the nonprofessional service provider
A fiduciary must act primarily in the interest of person to whom a
responsibility is owed. Captured by the notions of loyalty and trust.
Unlock document

This preview shows page 1 of the document.
Unlock all 3 pages and 3 million more documents.

Already have an account? Log in

Get OneClass Notes+

Unlimited access to class notes and textbook notes.

YearlyBest Value
75% OFF
$8 USD/m
Monthly
$30 USD/m
You will be charged $96 USD upfront and auto renewed at the end of each cycle. You may cancel anytime under Payment Settings. For more information, see our Terms and Privacy.
Payments are encrypted using 256-bit SSL. Powered by Stripe.