Use of electronic signatures for mission documentation


Is a client’s electronic signature on engagement letters, management representation letters and other documents acceptable? This is a question many practitioners ask the AICPA professional liability insurance program. In fgeneral, esignature are binding and therefore comparable to a “wet” signature on a paper document for the purposes of proving their validity, opposability and admissibility in the event of a dispute. However, there are caveats that must be heeded and understood. This column explores these considerations to help refute a claim that a eSignature is not genuine.


On June 30, 2000, the Law on Electronic Signatures in Global and National Commerce (ESign Act), PL 106229, was promulgated, providing a general rule for the validity of electronic records and signatures relating to transactions in or affecting interstate or foreign commerce. For a signature to be valid under the ESign Law, information relating to a transaction affecting interstate or foreign commerce must be provided or made available to the consumer in writing. The use of an electronic record to provide or make available such information is satisfied if it meets several basic requirements related to consent, withdrawal and notification.

the ESign The law is reflected, in some form of legislation, by all states and allows most documents to be signed electronically. However, the application of esign documents can be more involved. Applicable case-law questionable esignature demonstrates that they are most likely to be respected, which has precedent value with regard to the successful use of esignature. Below we describe several common questions regarding the validity of esignature, summarize cases that help answer these questions and provide takeaways for CPA firms to to consider.

Does the electronic signature really come from the individual whose signature is affixed?

The case: In Julie Ann Zulkiewski v. American General Life Insurance Co., No. 299025 2012 WL 2126068 (Mich. Ct. App. 2012), someone changed the beneficiary of a life insurance policy using a eSignature. After the death of the insured, both the new beneficiary and the former beneficiary questioned the validity of the eSignature. The court ruled that in the absence of evidence to the contrary, the person who changed the beneficiary had the correct login information to create the change. As a result, the court confirmed the change of file made through the eSignature.

To take with: Plus the amount of personal information required to create and use a eSignature, the more likely it is that the validity of the signature will be confirmed. According to Zulkiewski court, some of this information may include, but is not limited to at:

  • Account Numbers;
  • Tax identification numbers; and
  • Mother’s young daughter Last name.

Will multiple documents with a single electronic signature be confirmed?

Cases: In Mitchell, et al. v. Craftworks Restaurants & Breweries, Inc., No. 18879 (RC) (DDC 2018), a restaurant employee claimed not to have esign a work contract. In its opinion, the court held that because the documents were individually signed by the employee, there was little chance of confusion over what was sign.

Likewise, but with a different decision, in Ruiz v. Moss Bros. Auto Group, Inc., 232 Cal. App. 4th 836, 181 Cal. Rptr. 3d 781 (4th Dist. 2014), the alleged eSignature of an employee under an employment contract was not retained. The court ruled in favor of the employee who did not specifically remember signing employment documents. There was no detailed record of when and how the documents were signed. Therefore, the court concluded that the employer did not have a safety procedure to back up its claim that the employee signed the documents.

To take with: If more than one document requires a signature, make sure that eSignature is affixed to each document to help reduce confusion regarding documents that have been sign.

Are documents signed on mobile devices valid?

The case: In Berkson, et al. vs. GOGO LLC, et al., 97 F. Supp. 3d 359 (EDNY 2015), a claimant claimed that the eSignature should not be confirmed as the screen of the mobile device was small and the terms were long. The court used the term “browsewrap” to describe a long set of contractual terms presented in a browser, including additional terms available through a hyperlink. The court also explored studies of reading behavior as well as previous court decisions before upholding the terms agreed to by the signer. Typically the eSignature will be enforceable under this decision if:

1.The presentation has given a reasonably prudent user, upon request, notice of the terms;

2. User has been encouraged to review the terms via a hyperlink; and

3.The hyperlink was placed in a prominent place where the user was likely to see this.

To take with: Signatories should be encouraged to review all applicable terms before signing an agreement, including when presented via a mobile device. For example, when a CPA firm incorporates standard terms and conditions into a hyperlinked engagement letter, the user should be encouraged to read and agree to the standard hyperlinked terms and conditions, as well as the engagement letter. Additionally, testing and documenting a user’s experience on different devices prior to an organization’s deployment of a mobile device signing process can help enforce a eSignature affixed to a document via a mobile device.

Is there an audit trail to support the delivery and receipt of documents?

The case: In IO Moonwalkers, Inc. v. Bank of America, 814 SE2d 583 (NC Ct. App. 2018), a customer entered into an agreement with a bank for credit card processing services. The deal was esign using a thirdparty signature verification company. The consumer esign documents, but later claimed that she never signed them and was therefore not bound by them. The court ruled that the eSignature was enforceable, based on the records kept by the thirdparty signature verification company. Documentation proving the recording of the e-mail delivery and the return of the esign documents, the audit trail, was critical, proving that the documents were delivered and returned from the customer’s email Account.

To take with: Documentation kept by thirdparty signature verification companies support the application of esignature. If a thirdparty solution is not in use, consider keeping documentation of office time records for meetings and emails, detailing the transmission and receipt of esign documents. Creating this audit trail is one of the benefits of using a esigning process.

Was there a prior agreement that replaces the electronically signed document?

The case: In Harpham Inspection v. Big moose, 2015 WL 5945842 (Mich. App. Ct. 2015), a client esign a home inspection agreement during the appointment process. Specific conditions have been included in the document presented to the client prior to the scheduled inspection. The client asserted that a verbal agreement for the services existed before a written agreement was esign. Testimony supporting the eSignature said the customer received a copy of the agreement via email and opened the document. In addition, the client had clicked on an agreement button affirming the terms of the contract. Although the client claimed that the document was not received or signed, the weight of the evidence supported a court decision upholding the eSignature and the document it was in affixed.

To take with: CPA firms generally discuss the services to be provided with the client before formalizing the engagement with a written document. Esignature engagement letter close to the client and engagement acceptance discussions but prior to service delivery can reduce the likelihood that a client will assert that there has been a verbal agreement related to services.


Appropriate use of esignature can provide a quick way to execute documents relating to the provision of professional services by CPA firms. Taking into account the takeaways described in this column, strategies can be developed to ensure that digital technology represents an efficient process and also helps mitigate risk. exposure.

Sign on the digital line

754 million: The number of global electronic signature transactions in 2017, up from 89 million in 2012.


Steven M. Platau, CPA, JD, is Professor of Accounting at the John H. Sykes College of Business, University of Tampa. Deborah K. Rood, CPA, is Risk Control Consulting Director at the CNA. For more information on this article, contact [email protected]

Continental Casualty Company, one of CNA’s insurance companies, is the underwriter of the AICPA professional liability insurance program. Aon Insurance Services, the national program administrator for the AICPA Professional Liability Program, is available at 800-221-3023 or visit

This article provides information, rather than advice or opinions. It is accurate to the best of the authors’ knowledge at the date of the article. This article should not be viewed as a substitute for recommendations from a committed professional. Such consultation is recommended in the application of this material in particular factual situations.

The examples are provided for illustrative purposes only and are not intended to set standards of care, to serve as legal advice, or to acknowledge that a given factual situation is covered by a CNA insurance policy. The relevant insurance policy provides the actual terms, coverages, amounts, conditions and exclusions for an insured. All products and services may not be available in all states and are subject to change without notice.


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