Trusted By The World’s
Leading Corporations

Photo of the legal professionals at Klein & Wilson

What steps can you take when you suspect accounting malpractice?

On Behalf of | Sep 23, 2022 | Legal Malpractice

The average person struggles with complex mathematics. When you have to add legal compliance and knowledge of tax code and other financial regulations into the mix, the complex arithmetic required likely exceeds the comfort level and capability of the average adult.

Businesses and professionals alike frequently hire accountants to file their tax returns, manage their payroll requirements and otherwise keep their financial matters well organized. Unfortunately, even licensed and insured accounting professionals can make major mistakes.

Their mistakes, in turn, may cost you or your business thousands of dollars. Gross negligence and conduct that does not match what the typical competent professional in an industry would do make constitute accounting malpractice. What can you do when you suspect accounting malpractice?

Validate the suspicion with financial records

It is often necessary for those who suspect accounting malpractice to work with attorneys and even forensic accountants to verify what misconduct or errors actually occurred. Legal and financial experts are often also necessary to quantify the impact of such malpractice.

Once you have evidence that someone did not properly perform their job, you can then potentially pursue a malpractice claim.

You must act swiftly to hold a professional accountable for malpractice

In California, most licensed professionals will carry insurance. You may be able to bring a claim against an accountant’s professional coverage if they made mistakes handling your finances. You may want to count on insurance, but you should still recognize that you need to take legal action.

Not everyone will carry adequate insurance for the scope of the mistakes that they make. A civil lawsuit may be necessary to recoup your losses, and you will need to pursue one soon after discovering the malpractice. Claims related to financial losses and injuries have a 2-year statute of limitations.

Especially if there have been complications during your negotiations with the insurance company or the accountant, you may need to file a lawsuit to protect your right to pursue compensation rather than risking the statute expiring and thereby losing the right to take legal action. You will always have the option of dismissing the lawsuit if you resolve things directly, but you won’t have any options if they run out the clock while negotiating a settlement with you.

Understanding the rules that govern accounting malpractice claims can help you pursue justice when you lose resources because of a professional’s failure.