Have you been the victim of accountant malpractice in Western Pennsylvania? If so, you have rights that need to be protected and you may qualify for compensation due to economic and financial losses. The Pittsburgh accountant malpractice attorneys at Friday & Cox are familiar with Pennsylvania laws regarding accounting and accountants. They have successfully prosecuted and defended accounting and auditor malpractice cases collectively involving hundreds of millions of dollars. They have strong financial and economic backgrounds and are fluent in the language of accountancy and finance. They are adept at reading and understanding financial statements and other accounting and auditing documents of every type. Please contact our legal team handling all types of professional malpractice claims including accountant and auditor malpractice. They provide free case evals and charge nothing if they do not recover for you.
What Is Accountant Negligence?
In the Commonwealth of Pennsylvania accountants and auditors are professionals who are subject to standards of care and rules of professional conduct that they are required to satisfy when representing their clients. Accounting or auditor malpractice occurs when an auditor or other accounting professional fails to follow those professional standards and rules and deviates from GAAP—Generally Accepted Accounting Principles or from GAAS—Generally Accepted Auditing Standards. When conducting audits of a company’s financial statements, an auditor must abide by professional standards of auditing in GAAS in order to express an opinion on the fair presentation of the financial condition of company in accordance with GAAP.
Regarding audits, there are ten (10) generally accepted auditing standards. These are further divided into the following three categories:
- The audit is to be performed by a person or persons having adequate technical training and proficiency as an auditor;
- In all matters relating to the assignment, an independence in mental attitude is to be maintained by the auditor or auditors; and
- Due professional care is to be exercised in the performance of the audit and the preparation of the report.
Standards of Field Work
- The work is to be adequately planned and assistants, if any, are to be properly supervised;
- A sufficient understanding of the internal control structure is to be obtained to plan the audit and to determine the nature, timing, and extent of tests to be performed; and
- Sufficient competent evidential matter is to be obtained through inspection, observation, inquiries, and confirmation to afford a reasonable basis for an opinion regarding the financial statements under audit.
Standards of Reporting
- The report shall state whether the financial statements are presented in accordance with generally accepted accounting principles;
- The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period;
- Informative disclosures in the financial statements are to be regarded as reasonably adequate unless otherwise stated in the report; and
- The report shall either contain an expression of opinion regarding the financial statements, taken as a whole, or an assertion to the effect that an opinion cannot be expressed. When an overall opinion cannot be expressed, the reasons therefore should be stated. In all cases where an auditor’s name is associated with financial statements, the report should contain a clear-cut indication of the character of the auditor’s work, if any, and the degree of responsibility the auditor is taking.
Our Pennsylvania accountant negligence attorneys have substantial experience both prosecuting and defending auditor and accounting malpractice cases alleging violations of each of the ten generally accepted auditing standards, and specifically:
Violations of the General Standards, including:
- AU Section 210 – Training and Proficiency of the Independent Auditor
- AU Section 220 – Independence
- AU Section 230 – Due Professional Care in the Performance of Work
Violations of the Standards of Field Work, including:
- AU Section 316 – Financial Statement Fraud Detection
- AU Section 329 – Analytical Procedures
- AU Section 333 – Management Representations
Violations of the Standards of Reporting, including:
- AU Section 410 – Adherence to Generally Accepted Accounting Principles
Our Pittsburgh accountant malpractice lawyers also has substantial experience and expertise handling financial fraud cases involving deliberate and negligent misstatements and omissions of amounts or disclosures of financial statements that were intended to or had the result of deceiving financial statement users, particularly investors and creditors. These cases have involved various forms of financial manipulation of corporate financial statements, whether the balance sheet, the statement of income or statement of operations, the statement of retained earnings, the statement of cash flows, or the statement of changes in owner’s equity. Examples of such financial statement fraud have included:
- Falsification, alteration, or manipulation of material financial records, supporting documents, or business transactions;
- Material intentional omissions or misrepresentations of events, transactions, accounts, or other significant information from which financial statements are prepared;
- Deliberate misapplication of accounting principles, policies, and procedures used to measure, recognize, report, and disclose economic events and business transactions; and
- Intentional omissions of disclosures or presentation of inadequate disclosures regarding accounting principles and policies and related financial amounts.
These manipulations often are designed either to inflate or record fictitious revenues, to report improper asset valuations, to conceal, minimize or underreport liabilities and expenses, or understate or mislead readers of the financial statements about material conditions or trends impacting the business’s bottom line or future prospects.
Contact Our Pittsburgh Accountant Malpractice Attorneys
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