Accountant Malpractice: A Major Headache for Some Businesses

Managing accounting is a major source of stress for many businesses, which is why they turn to a professional to take over financial affairs. But what if the accountant fails to properly manage the accounts? 

 Accountants are generally required to follow: 

When accountants deviate from these standards, accountant malpractice can occur. Some types of accountant malpractice include: 

Breach of Contract

This form of malpractice is usually the result of an intentional act on the part of the accountant that constitutes a breach of contract. When an accountant agrees to provide professional services but fails to produce a specified result or adhere to an appropriate standard of professional care, and this failure causes the business to suffer harm, a breach of contract has occurred.

Negligence

Like any other tort claim, when alleging negligence against an accountant, four basic elements must be proven:

  • The accountant had a duty of reasonable care to provide accounting services.
  • The accountant failed to use the skill, learning, and care normally used by accountants in similar situations, resulting in a breach of duty.
  • Due to this breach of duty, the plaintiff suffered harm.
  • A causal relationship exists between the accountant’s breach and a plaintiff’s damages.

 Misrepresentation

Sometimes an accountant will make a misrepresentation in order to hide wrongdoing. This misrepresentation may in itself be considered negligence, fraud, or deceit; such as, if an accountant makes a misrepresentation in order to conceal embezzlement or some other wrongful act. Intentional misrepresentations or claims of gross negligence can result in higher damages awarded to a plaintiff.

If you suspect that your accountant committed malpractice by deviating from GAAS or GAAP standards, contact Murray & Murray online or call (419) 664-3711 today. 

Categories