Wisconsin Accounting Malpractice
When engaging any type of accounting professional, including bookkeepers, CPAs, and auditors there is an expectation that these professionals are following certain rules and regulations while providing expert recommendations and instructions to clients during services such as preparing taxes, managing assets and general business consulting. If these professionals do not maintain their certified responsibilities which leads people to suffer financial losses, these people may be able to recuperate some of these losses by filing an accountant malpractice lawsuit. Those who endure financial losses because of an accounting professional’s poor advice, improper audits or breach of contract could be indicative of them being victims of accounting malpractice and the business litigation lawyers of Loftus & Eisenberg can help.
There are numerous guidelines established to administer and manage accounting firms. Some of these guidelines are the Generally Accepted Auditing Standards (GAAS), the Generally Accepted Accounting Principles (GAAP), and the Public Company Accounting Oversight Board (PCAOB). In addition, the 2002 Sarbanes-Oxley Act is a law that was passed by Congress post the major financial disasters of the early 2000’s to help safeguard shareholders from businesses and corporations’ fraudulent or falsified financial reporting by inflicting hard-hitting new punishments on accounting professionals who break the law.
Accounting malpractice can be a consequence of auditors who are asked to identify internal weak spots and to execute risk assessments, but do so in a false or inadequate manner. Although mistakes made by accountants do not necessarily mean malpractice has transpired, but some of the many foundations that could comprise an accounting malpractice lawsuit are:
- Client suffers substantial financial losses;
- The accounting professional does not follow the rules as established by the industry regulations and guidelines;
- Accountant owes the client a duty of professional care to his clients and in some circumstances other people who may also be using the accountants advice and work;
- The accounting professional breaches the duty of care owed to the client, maybe by failing to follow the regulations listed above or by a deliberate unlawful doing, such as misallocating funds or assets and fraudulently editing financial statements
- There is a demonstrable, causative link between the supposed breach of duty and the losses that the client experiences.
Some specific actions that can result in an accounting malpractice lawsuit are:
- Not maintaining confidentiality with the client
- Fraud and embezzlement
- Omitting or misrepresenting material facts
- Mistaken estate planning advice
- Faulty advice on any accounting subjects
- Any violation to either State or Federal securities laws
- Erroneous tax returns
- Not following GAAP, GAAS and PCAOB guidelines
- Meet licensing and continuing professional education (CPE) requirements
- Inadequate preservation of financial documents
- Incorrect certification of financial statements
- Lack of identifying fraud or fraudulent audits
- Substantial AP/AR errors
- Not avoiding clear conflicts of interest
- General incompetence with performing professional services including not having performed any due diligence on the client and client’s financial situation in order to have a rational foundation for the recommendations offered
The Wisconsin business lawyers of Loftus & Eisenberg are experts in understanding the standards of accounting best practices and regulations. If you believe you have been a victim of accounting malpractice, our business litigation attorneys can help.