ACCOUNTING MALPRACTICE LAW
Accountants are legally obligated to comply with the generally accepted standards of auditing and accounting. When an accountant fails in their duty, it is the client that bears the risk of loss. For accounting malpractice law imagethis reason, accounting malpractice litigation exists to make sure that the accountants, not their clients, suffer the consequences of their mistakes.
Many mistakes, from giving bad tax advice to simply failing to file taxes, can rise to the level of accounting malpractice. In order to show that an accountant failed in his duty to a client, an attorney must prove that the general principles of tort law are present:
1. The accountant must have a duty to you, the client. This is easily satisfied in most cases, but does mean that a plaintiff cannot generally sue an accountant who was not working for them
2. The accountant failed to perform, or breached, his duty. This means that in the course of his work for the client, the accountant must have given bad advice or failed to accomplish a task that it was his job to accomplish.
3. The breach of duty must have actually injured the client in some way. The plaintiff must show that had the accountant not failed his duty, the plaintiff would be better off financially.
4. That the accountant’s breach of duty was the legal cause of the injury. This is simply getting at the idea that, if your financial well-being was damaged at the same time as the accountant’s breach of his duty, but was not actually caused by the accountant, he will not be at fault.
This is a fairly high barrier to recovering monetary damages from an accountant, but where your accountant acted in such a way that your financial situation was adversely affected, you may be able to hold the accountant responsible.
An attorney may be able gather the necessary information to prove your case and help you recover what you lost as a result of your accountant’s negligence.