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Are documents signed on mobile devices valid? Was there a prior understanding that supersedes the
The case: In Berkson, et al. v. GOGO LLC, et al., 97 F. e-signed document?
Supp. 3d 359 (E.D.N.Y. 2015), a plaintiff asserted that The case: In Harpham v. Big Moose Inspection, 2015 WL
the e-signature should not be upheld because the mobile 5945842 (Mich. App. Ct. 2015), a client e-signed a home
device screen was small and the terms were lengthy. The inspection agreement while in the process of making an
court used the term “browsewrap” to describe a lengthy set appointment. Specific terms were included in the document
of contractual terms presented within a browser, including presented to the client prior to the scheduled inspection. The
additional terms available via hyperlink. The court also client asserted that an oral agreement for services existed
explored studies on reading behavior as well as prior court before a written agreement was e-signed. Testimony support-
decisions before upholding the terms agreed to by the ing the e-signature stated that the client was emailed a copy
signer. Typically, the e-signature will be enforceable under of the agreement and had opened the document. Moreover,
this decision if: the client had clicked on an agreement button affirming the
1. The presentation gave a reasonably prudent user, on terms of the contract. Although the client asserted that the
inquiry, a notice of the terms; document had not been received or signed, the weight of the
2. The user was encouraged to examine the terms via a evidence supported a court ruling upholding the e-signature
hyperlink; and and the document to which it was affixed.
3. The hyperlink was placed in a prominent location where Takeaway: CPA firms generally discuss services to be
the user was likely to see it. provided with the client prior to formalizing the engagement
Takeaway: Signatories should be encouraged to with a written document. E-signing an engagement letter close
review all applicable terms prior to signing an agreement, to client and engagement acceptance discussions but before
including when presented through a mobile device. For rendering services may reduce the likelihood of a client asser-
example, when a CPA firm incorporates standard terms tion that there was an oral agreement related to services.
and conditions into an engagement letter by hyperlink,
the user should be encouraged to read and agree to the FINAL THOUGHTS
hyperlinked standard terms and conditions, as well as the The appropriate use of e-signatures can provide an expeditious
engagement letter. In addition, testing and documenting means of executing documents relative to the delivery of pro-
a user’s experience on different devices prior to a firm’s fessional services by CPA firms. By considering the takeaways
deployment of a mobile device signature process may assist outlined in this column, strategies may be developed to ensure
in the enforcement of an e-signature affixed to a document that digital technology represents an efficient process and also
via a mobile device. helps to mitigate risk exposure.

Is there an audit trail to support the delivery and receipt Steven M. Platau, CPA, J.D., is professor of accounting at the
of documents? John H. Sykes College of Business, The University of Tampa.
The case: In IO Moonwalkers, Inc. v. Banc of America, Deborah K. Rood, CPA, is a risk control consulting director at
814 S.E.2d 583 (N.C. Ct. App. 2018), a customer entered CNA. For more information about this article, contact
into an agreement with a bank for credit card processing specialtyriskcontrol@cna.com. ■
services. The agreement was e-signed using a third-party
signature verification company. The customer e-signed the Continental Casualty Company, one of the CNA insurance companies, is the underwriter of
the AICPA Professional Liability Insurance Program. Aon Insurance Services, the National
documents but later asserted it never signed them and, thus,
Program Administrator for the AICPA Professional Liability Program, is available at
was not bound to them. The court held that the e-signature 800-221-3023 or visit cpai.com.
was binding, based upon the records maintained by the This article provides information, rather than advice or opinion. It is accurate to the
best of the authors’ knowledge as of the article date. This article should not be viewed as a
third-party signature verification company. Documenta-
substitute for recommendations of a retained professional. Such consultation is recommended
tion evidencing the email delivery record and return of the in applying this material in any particular factual situations.
e-signed documents, the audit trail, was critical, proving Examples are for illustrative purposes only and not intended to establish any standards
that the documents were delivered to and returned from of care, serve as legal advice, or acknowledge any given factual situation is covered under
any CNA insurance policy. The relevant insurance policy provides actual terms, coverages,
the customer’s email account.
amounts, conditions, and exclusions for an insured. All products and services may not be
Takeaway: Documentation retained by third-party available in all states and may be subject to change without notice.
signature verification companies supports the enforce-
ment of e-signatures. If a third-party solution is not used,
consider retaining documentation of office time records for
meetings and emails, detailing transmission and receipt of
the e-signed documents. Creating this audit trail is one of
the advantages of using an e-signature process.

journalofaccountancy.com January 2022 | 5