Accountant's Liability

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 ?
The "near-privity test" limits an accountant's liability exposure to those with whom the accountant is in privity or in a relationship sufficiently approaching privity, but the court found that standard "too narrow."
In addition to practicing in such areas of insurance/reinsurance coverage disputes, shareholder derivative actions, ERISA disputes, professional negligence defense, accountant's liability actions, catastrophic personal injury defense and complex construction disputes, Ragsdale Liggett also maintains a well respected lobbying government relations and mediation groups and practices equine law as well.
The Accountant's Liability," sponsored by The CPA Journal.
2d 745 (1992).) In that case, the state high court held that an accountant's liability for general negligence in conducting an audit of its client's financial statements is confined to the client.
The accountant's liability to nonclients is not restricted unless the writing requirements are met.
Alternatively, in states that have eliminated joint liability for economic damages if the accountant's fault is below a minimum level, the accountant's liability is uncertain.
This list is adapted from the Accountant's Liability Newsletter, Second Quarter 1994 ([C] 1994, Aon Insurance Services, Trevose, Pennsylvania.
In addition to practicing in such areas of insurance/ reinsurance coverage disputes, shareholder derivative actions, ERISA disputes, professional negligence defense, accountant's liability actions, catastrophic personal injury defense and complex construction disputes, Ragsdale Liggett also maintains a well respected lobbying government relations and mediation groups.
He is a frequent lecturer and author on the subject of accountant's professional liability and is the editor of The CPA Journal's Accountant's Liability column.
One of the first cases to extend an accountant's liability was Rusch Factors, Inc., v.
In adopting a middle ground, an accountant's liability was limited to parties that the accountant intended to rely on his or her report or to parties an accountant knew the client intended to influence with his or her report.
Dan L Goldwasser, Esq., is a partner of Vedder, Price, Kaufman, Kammholz & Day, concentrating in counseling and defending CPAs He is a frequent lecturer and author on tbe subject of accountant's professional liability and is the editor of The CPA Journal's Accountant's Liability column.

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