Accounting Malpractice, Negligence, Fraud, and Errors

Accounting malpractice, negligence, fraud, and errors are general concepts that apply to CPAs, accountants, bookkeepers, financial advisors, and related financial professionals in Minnesota.

Accounting malpractice includes

  • Billing clients fraudulently or inaccurately
  • Committing tax errors, tax fraud, or tax evasion
  • Committing violations of federal and state securities laws
  • Conducting wrongful certification of financial statements
  • Deviating from GAAP that result in fines
  • Deviating from GAAS that result in inaccurate shareholder reports, lawsuits, or fines
  • Failing to follow reasonable standards of care in accounting
  • Failing to properly audit financial statements or detect defalcations
  • Failing to provide accurate advice on financial aspects of corporate restructuring
  • Failing to reasonably detect fraud
  • Giving erroneous advice regarding accounting matters, committing inventory errors, or failing to provide correct tax advice
  • Improper tax returns
  • Keeping poor financial books
  • Making misstatements on financial audits
  • Manipulating reports to impact stock value
  • Using improper accounting practices to enable or cover-up embezzlement or fraud, including tax investment cases, securities fraud, and CPA license fraud

Financial professionals are held to various standards, depending on their positions and the circumstances. For example, the Minnesota Society of CPAs requires its members to abide by the AICPA Code of Professional Conduct. The Professional Ethics Committee of the Minnesota Society of CPAs investigates complaints against its members to determine whether the AICPA Code of Professional Conduct has been violated.

Accounting malpractice lawsuits are fraught with complexity, including procedural requirements and additional evidentiary requirements, as highlighted by this article: Before You Sue The Accountants. For this reason, working with an attorney experienced with such matters is advisable.