Accountants, like other professionals, owe a special duty to their clients. Because of their specialized, advanced knowledge and training, you have to rely on your accountant’s expertise and trust that they are performing their services competently. Accounting malpractice may not get as much attention as medical or even legal malpractice, but it is a serious and under-appreciated problem. Accountants must abide by the rules set forth by the Generally Accepted Accounting Principles (GAAP), Generally Accepted Auditing Standards (GAAS), and Public Company Accounting Oversight Board (PCAOB). Accounting malpractice from the failure to conduct professional services in accordance with these aforementioned rules and regulations set forth by the applicable governing bodies can have significant financial ramifications for the decision-makers who rely upon the financial information they prepared. Accounting malpractice may also be found to be in violation of federal and/or state securities laws when false statements have impacted the market.
To be successful in an accounting malpractice lawsuit, the plaintiff must establish four elements:
- The accountant had a duty to the plaintiff
- The accountant breached that duty
- He or she was injured (including financial harm); and
- The accountant’s breach of that duty was the proximate cause of the injury.
Some common examples of accountant misconduct that can lead to a lawsuit include:
- Making tax return errors
- Giving incorrect tax advice
- Failure to recommend an audit
- Failure to detect embezzlement
- Manipulating financial statements
- Inaccurately evaluating a financial transaction or statement
- Keeping poor financial records
- Giving bad advice about an estate planning matter or an investment
Contact Our Experienced Professional Malpractice Attorneys for a Free Initial Consultation
The lawyers at Foster Wallace have extensive training on accounting issues and business backgrounds that lends itself to assisting on accounting malpractice cases. If you or someone you love has suffered due to a professional’s misconduct, call our office today or fill out our online contact form to set up your free initial consultation.