We expect every professional to deliver what they promise and act responsibly and ethically, but there are certain services where that is particularly true, and where failure to do so represents malpractice. Though physicians and healthcare professionals are most commonly associated with malpractice, the term can apply to others, including accounting. If you’ve discovered troubling discrepancies or financial losses attributable to your accountant or accounting firm’s behavior, here’s what you need to know about accounting malpractice.

  • Every accountant is expected to practice under the standards known as Generally Accepted Accounting Principles, or GAAP. The ten key concepts of GAAP represent the industry standard for financial reporting for public companies. There is also a code of professional conduct outlined under the rules of the American Institute of Certified Public Accountants. Together and on their own, they encompass the duty of care that accountants owe to their clients, including avoiding conflicts of interest, performing services with competence, not omitting or misrepresenting material facts, and acting with due diligence. Failure to uphold these and other standards may represent accounting malpractice.
  • There is no single type of accounting malpractice. Mishandling a tax return can qualify, but so too can providing faulty tax advice or negligent preparation of financial documents. Accountants can either negligently or fraudulently overbill, improperly maintain records, aid in tax evasion, embezzle, fail to properly audit financial statements, and these are just a few examples of actionable issues.
  • To prove an accounting malpractice claim, victims have to show that a duty of professional care existed between them and the accountant or accounting firm; that there was a breach of that duty of care; that monetary losses exist; and that there is a provable, causal link between the breach of duty and the monetary loss.

Being a victim of accounting malpractice can lead to devastating financial losses, and the only way to recover is to successfully prove your case in court. It is important that you maintain all documents pertaining to your situation as well as all records of communications between you and your accounting firm. It is also essential that you work with attorneys with a strong understanding of accounting malpractice and a proven track record of successfully pursuing and winning this type of case.

For information on how we can help you through the challenges of an accounting malpractice claim, contact our firm today to set up a time for a consultation.