Accounting Malpractice 101 – Accounting Malpractice Cases in Philadelphia
When people hear the word malpractice, they generally think of medical malpractice, which is negligence on the part of a physician or health care provider. But malpractice can come in many forms and can be attributed to many different professions, including accounting. In accounting malpractice cases, clients are able to sue their accountant or accounting firm for failure to provide services at the level that would reasonably be expected of an accounting professional. The attorneys at Bochetto & Lentz have a successful record of prosecuting accounting malpractice cases in Philadelphia. If you have suffered harm at the hands of a negligent accountant, call us today to see how we can help.
As is true with all other types of malpractice, a successful accounting malpractice case must have certain components in order to demonstrate that the defending accountant performed their duties in a negligent way. These components are:
- The establishment of a professional relationship between the accountant and the client that created a duty of care to the client.
- Evidence of failing to provide responsible and competent accounting services. This might include failing to follow the law or established accounting practice.
- Harm must have taken place. You cannot sue your accountant for malpractice after finding a mistake on your own that caused no damage. Damages in accounting malpractice typically includes a loss of property or money.
- You must be able to prove that the damage or loss that you suffered was a result of the accountant’s negligence.
Generally speaking, accounting malpractice falls into one of two categories – either failure to follow the Generally Accepted Accounting Principles (GAAP) and Generally Accepted Auditing Standards (GAAS), or failure to follow federal and state securities regulations. The first type is the most commonly applied accounting malpractice claim, but securities malpractice can occur when an accountant either fails to follow securities rules or purposely creates a false financial statement for a business.
Accounting malpractice can result in a client having to pay additional taxes or fines. Examples of the types of errors that an accountant may make that represent malpractice include:
- Accounting fraud
- Accounts Receivable or Accounts Payable Errors
- CPA license fraud
- Failure to properly audit financial statements
- Inventory errors
- Improper tax advice
- Tax investment cases
- Poorly kept financial books
- Improper tax returns
Whether you are an individual, a bank that has relied upon information prepared by an accountant, a shareholder in a derivative suit or an investor who relied on informationn an accountant or accounting firm assumes responsibility for your accounting needs, they do so with the reliance that you as a client are providing them with accurate information. If you have done so and the accountant fails to deliver those services appropriate at cost to you, then accounting malpractice may have taken place and you may be entitled to damages such as compensation for lost profits, interest fines, and penalties. The experienced attorneys at Bochetto & Lentz have extensive knowledge of what’s needed to win accounting malpractice cases in Philadelphia. Call us today to set up an appointment.
Learn more about Accounting Malpractice HERE.