Accounting malpractice takes place when a professional commits fraud or negligence that is not consistent with the reasonable standard of care in the field of accounting.
As is the case with other types of malpractice, these kinds of cases can be difficult to prove and often times require a large amount of forensic accounting efforts to make a case. When you hire an accounting malpractice lawyer as a plaintiff, they will need to prove the following:
- That the accountant had a duty to you
- They breached that duty
- That you, as the plaintiff, suffered damages as a result of the breach
- That the accountant’s breach was the legal cause of the damages.
Many accountants are Certified Public Accountants and in addition to state laws, they are also bound by a set of professional standards as well. Failure to meet these standards can add significantly to the merit of a plaintiff’s case.
CPAs are required to follow Generally Accepted Auditing Standards and Generally Accepted Accounting Principles, and failure to do so can result in accounting malpractice. There are clear guidelines on how CPA firms must prepare business income, expenses and assets on financial statements, as well as standards for maintaining independence, professional care and maintaining proficiency in performing audits. In addition, accountants are legally obligated to not commit negligence or fraud.
However, there are instances when accounting malpractice does take place. Some types of malpractice may include:
- Improper tax advice.
- Failing to provide properly audited financial statements.
- Not complying with Generally Accepted Auditing Standards or Generally Accepted Accounting Principles.
- Improperly handling the sale of securities, including not following the Racketeer Influenced and Corrupt Organizations Act (RICO). This may include manipulating reports to impact a stock’s value.
- Aiding and abetting embezzlement.
- Wrongful certification of financial statements.
- Billing fraud.
Zagrans Law Firm proudly serves Cleveland and the surrounding Ohio communities of Brooklyn, Lakewood, East Cleveland, Parma, Seven Hills, Rocky River and University Heights.