When you work with an accountant, either for your individual needs or those of your business, you should be able to expect that your accountant will use his or her experience and knowledge to ensure that your financial needs are attended to properly. No egregious mistakes should occur when you work with your accountant to keep business records or to file your tax returns.
However, in some situations, an individual or her business suffers because of an accountant’s mistakes. Sometimes professional mistakes rise to the level of professional negligence, or accounting malpractice. In such cases, the injured party may be able to file a claim for compensation.
What is Accounting?
In order to understand the duties that accountants owe to their clients, it is necessary first to understand what accounting involves. According to an FAQ sheet from the American Institutes of CPAs (AICPA), accounting “deals with interpreting and communication information about a company’s operations and finances.” It is “extremely important to any company because the financial information, as interpreted by CPAs, allows executives to make informed business decisions . . . that help those companies become more successful.” Accountants help to make sense of past business transactions and information, as well as to make “recommendations . . . for forecasting future events.”
Code of Professional Conduct for Certified Public Accountants
The AICPA Code of Professional Conduct requires that accountants behave in certain ways in relation to clients. It applies to members of the AICPA—who are licensed CPAs—in public practice, in business, and even those who are retired or unemployed. The Code requires member CPAs to carry out responsibilities in a manner that serves the public interest, and with integrity and due care. Even if an accountant is not a CPA or not a member of the AICPA, however, Connecticut negligence laws still apply.
Connecticut Malpractice Claims for Professionals
Connecticut law permits an injured party to file a professional malpractice claim against an accountant if the account is negligent in performing his or her duties. The case Mukon v. Gollnick defines professional malpractice as “the failure of one rendering professional services to exercise that degree of skill and learning commonly applied under all the circumstances in the community by a reasonable prudent member of the profession with the result of injury, loss, or damage to the recipient of those services.”
The court ruling in Stuart v. Freiberg clarifies that there are four elements to a professional malpractice claim in Connecticut:
- Accountant had a duty to adhere to a standard of conduct for the plaintiff;
- Accountant failed to adhere to that standard;
- Plaintiff suffered an actual injury; and
- Accountant’s act (or omission) caused the plaintiff’s injury.
Types of Claims Against Accountants in Connecticut
What kinds of accounting malpractice claims typically arise in cases where an accountant’s mistakes resulted in a plaintiff’s injury? The following are examples of common accounting malpractice issues:
- Failure to discover employee theft;
- Failure to keep proper records;
- Failure to file proper tax returns; and
- Errors on tax returns; and fiduciary misconduct.
Victims of accounting malpractice may be able to file a claim by speaking with a Connecticut accounting malpractice attorney. Don’t hesitate to reach out to an attorney at our office today to learn how we can be of assistance in your case.