Lesser Law Group

Negligence or misrepresentation could be accounting malpractice

Individuals and businesses in California often rely on accountants to track financial activity and prepare financial statements and tax returns. Accounting mistakes have the potential to get clients in financial or even legal trouble. Professional malpractice may occur when mistakes arise from negligence, misrepresentation or deviation from professional standards and practices. Under these circumstances, a client could pursue damages from the responsible professional.

A formal agreement to provide services between the accountant and client generally specifies that the accountant will comply with professional standards. Intentional departures from recognized standards could represent a breach of contract. The breach by definition must cause direct harm to the client.

At times, a breach of contract claim might include accusations of negligence. Negligence could be evident if the professional did not apply skill and care when performing work and the sloppy accounting caused harm.

Negligence may also happen when an accountant misrepresents work to conceal wrongdoing like embezzlement. For legal complaints about misrepresentation to succeed, the client must show reliance upon the representations made by the accountant and damages coming from that reliance. Evidence of misrepresentation could indicate fraud and support a larger claim of damages.

A person concerned about the actions of an accountant could talk to an attorney familiar with professional malpractice litigation. Legal counsel could evaluate the contract/financial records and identify potential evidence of misconduct and harm. When necessary, an attorney might recommend an independent forensic accountant to examine records and find evidence to support a lawsuit. Prior to taking a case to trial, the lawyer could open negotiations for a settlement. If pretrial discussions do not resolve the matter, an attorney could organize the evidence and explain it in court.

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