Accountant malpractice is premised on the existence of some contractual relationship between the client and the accountant. Establishing an accountant’s liability to a third party (non-client) is a bit more difficult and would have to be premised upon some fraud or misrepresentations or securities law violation committed by the accountant. Third-party liability would include instances wherein the accountant and the client do not have a direct contractual relationship.
The basic standards of care for the accounting industry are set forth in:
To the extent the standard of care is not found therein then it is governed by the general principle of what the reasonably prudent practitioner would do in that circumstance.
Fraud or misrepresentation can of course always be the basis of liability against an accountant whether it be a claim brought by the actual client of the accountant or some third-party. In addition, the securities laws at both the federal and state level may be a source of potential violations based upon either shareholder actions or due to the improper sale of securities.
Much of what accountants do revolves around tax advice. This is a very specialized area and as such any malpractice action is going to require retaining another accountant or lawyer to explain the tax issue to the jury. This witness would be designated as an expert. The expert would then be expected to testify as to the standard of care that applied to the accountant. The expert would then testify as to how the accountant fell below that standard of care. Finally the expert would address how the client had been damaged as a result of that substandard conduct by the accountant. Those are the basic elements of an accountant malpractice claim.
If you have been injured in Virginia, Maryland or Washington DC as a result of the negligence or actions of an accountant, contact malpractice attorney Brien Roche.
For more information on accounting see the pages on Wikipedia.