Accountant's Liability

(redirected from Accountant's Responsibility)

Accountant's Liability

The legal responsibility an accountant has for fraud or gross negligence. That is, the accountant's liability is the potential exposure he/she has to a lawsuit. In general, an accountant who does not conform (whether deliberately or accidentally) to the Generally Accepted Accounting Principles or the Generally Accepted Auditing Standards is more likely to face legal action. See also: Accountants Liability Insurance.
References in periodicals archive ?
19 revises the reporting requirements for compilation and review engagements to make the reports clearer as to management's responsibilities and the accountant's responsibility.
The third paragraph states the accountant's responsibility to conduct the compilation in accordance with SSARSs issued by the AICPA and the objective of the compilation.
Although it reinforces the accountant's responsibility, it does not add any new accountability for planning and supervising the service provider's work beyond what is called for by applicable professional standards based on the type of engagement.
Rule 301 under the AICPA Code clearly states a professional accountant's responsibility to hold client information confidential.
This broader definition mitigates the accountant's responsibility to evaluate employee competence.
The assumption was that an accountant's responsibility would be restricted to what was in the letter.
Thus, an engagement letter is necessary but not always sufficient to establish the limits of an accountant's responsibility to the client.
It is the fourth authoritative expression issued by the profession in the last twenty-five years that attempts to define the accountant's responsibility to detect fraud when performing an audit of financial statements in conformity with generally accepted auditing standards (GAAS).
Historical Perspective of Accountant's Responsibility
This has been defined as the difference between what the public perceives the accountant's responsibility to be and what the accountant thinks is sufficient and professional performance.
This is to be expected as preparation of budgets is already part of an accountant's responsibility.
16, was apparently intended to expand the accountant's responsibility for the detection of fraud.