Accountant malpractice is a breach of contract action. The contract is between the client and the accountant. The contract is for services. The services may be tax services, bookkeeping, auditing etc.
The malpractice is a breach of the contract. An accountant malpractice case is like any professional liability claim. You must establish the standard of care. You must also prove a breach of the standard of care, causation and damages .
You will find the basic standards of care for the accounting industry in:
You may have to prove the standard of care by going to other sources. The standards may be governed by the general principle of what the reasonably prudent person would do in that case. That is, what would the reasonable accountant do.
Fraud or misrepresentation can of course always be the basis for proving liability against an accountant. This is true whether the client sues or the third party sues. The securities laws at either the federal and state level may be a source of potential violation. These may be based upon shareholder actions. They may also be based on the improper sale of securities.
Proving an accountant’s liability to a third party (non-client) is a bit more difficult. This is normally based upon some fraud. Or you may prove it through securities violations. In this type of case the accountant and the third party may not have a contract for services.
Much of what accountants do revolve around tax advice. This is a very specialized area. As is true with most malpractice actions you have to retain another accountant or tax lawyer as an expert.
This accountant or tax lawyer must explain the tax issue to the jury. The witness will testify as an expert. The expert will testify as to the standard of care that applies. She will also testify as to how the accountant fell below that standard of care. Finally she will address how the client has been damaged as a result of that substandard conduct by the accountant. Those are the basic elements of an accountant malpractice claim.
To obtain counsel in Virginia, Maryland or Washington DC as a result of the negligence or actions of an accountant, contact attorney Brien Roche.
For more information on accounting see the pages on Wikipedia.