Many people in California do not feel comfortable handling their own accounting. They may opt to use an accountant who can assume the responsibility of ensuring that their taxes and other financial matters are in good standing. However, if the accountant does not properly manage their accounts, they may be the victim of accounting malpractice.
The Generally Accepted Auditing Standards and Generally Accepted Accounting Principles are protocols by which accountants are bound to abide by. GAAS pertains to when accountants provide an objective and transparent auditing of their clients’ accounts. GAAP applies when accountants prepare financial statements on the behalf of clients. There are various forms of accountant malpractice that could take place when accountants stray from the standards and principles established by GAAS and GAAP.
The acts or omissions where accountants deliberately stray from accepted practices may be considered breaches of contract. A client should closely examine their accounting agreement documents to determine if the professional’s actions qualify as a breach of contract.
Certain factors have to be in place in order for a breach of contract to occur. There must be an agreement between the client and accountant for professional services to be provided. The accountant must fail to yield certain results or fail to adhere to a proper standard of professional care. Furthermore, the failure of the accountant must cause direct harm to the client.
An attorney may consider the factors of a client’s case before advising if there is cause to file a lawsuit for some form of malpractice. The attorney might conduct independent investigations to locate evidence that the accountant committed fraud.