Most taxpayers have neither the time nor the complex knowledge needed to confidently prepare their taxes and financial statements themselves, and as a result, they put their trust in professional accountants. Unfortunately, not every accountant is worth the fees that they charge. Whether it’s a lack of ethics or ability, when the professional that you hire fails to provide the service that you’ve paid for and it results in a significant harm, one of the few remedies available is to file an accounting malpractice lawsuit.
Though litigation can be effective, it’s even better to avoid suffering damages in the first place, and the only way to do that is to remain vigilant. Keep your eyes open for the warning signs listed below, as they may be an indication that your accountant is failing to meet the professional standards to which they are supposed to adhere:
- You find that they are constantly making the kinds of mistakes that a simple, careful review would have caught. You are the client – you shouldn’t need to double-check a professional’s work.
- The accountant behaves in an obviously unprofessional way, whether in terms of the language that they use, the comments that they make, their general lack of decorum or suggestions that you take unethical steps with reference to your financial statements or tax documents.
- They fail to avoid conflicts of interest.
- They discuss the details of other clients’ financial situations with you, thus breaching accountant/client confidentiality standards.
Accountants are responsible for adhering to industry standards known as “Generally Accepted Accounting Principles,” or GAAP, which are created by the Financial Accounting Standards Board. Though following these rules are only required of public companies, they are still widely seen as the standard for how accounting firms should conduct themselves. Individual accountants have their own standards of professional conduct issued by the American Institute of Certified Public Accountants. Accountants who demonstrate a duty of care to their clients follow these standards, while those who don’t follow them and who end up leading to their clients suffering damages may be guilty of accounting malpractice.
Proving an accounting malpractice claim requires that several legal elements be proven, including that the accountant owed you a duty of care, that they breached that duty, that you suffered monetary losses, and that all of these elements are connected. For assistance in determining whether you have been a victim of accounting malpractice, contact our experienced law firm today.