Accounting

The Liability of Accountants to Non-Clients for Professional Malpractice (Portfolio 5501)

  • This Portfolio identifies and explains each of the standards under which the liability of accountants to non-clients is considered by the courts.

Description

Portfolio 5501, The Liability of Accountants to Non-Clients for Professional Malpractice (Accounting Policy and Practice Series), identifies and explains each of the standards under which the liability of accountants to non-clients is considered by the courts. Those standards have developed through the common law and, in some instances, have been legislated in each of the fifty states.

This Portfolio also examines how engagement letters and representation letters may be used as risk management tools to avoid or minimize potential exposure to claims of professional malpractice. As part of that examination, the Portfolio discusses the professional standards on engagement letters and representation letters and considers cases in which determinations of liability have been influenced by the content of those letters. Examples of illustrative engagement letters accompany the Portfolio.

The Portfolio includes a state-by-state survey of the legal standards for the liability of accountants to non-clients. For each state, key cases or statutes are identified and analyzed. Relevant statutes, principal cases and the provisions of Restatement (Second) of Torts ยง 552 (1977) accompany the Portfolio.

This Portfolio may be cited as Bloomberg Tax Portfolio 5501, Gold and Spinogatti, The Liability of Accountants to Non-Clients for Professional Malpractice (Accounting Policy and Practice Series). Within the Accounting Policy and Practice Portfolio Series, however, references to the Portfolios will include only the Portfolio numbers and titles.

Table of Contents

I. Preface
II. The Sources of the Rule of Law for the Liability of Accountants to Non-Clients for Professional Malpractice
III. Engagement Letters and Representation Letters As Risk Management Tools
IV. Professional Standards on Engagement Letters and Representation Letters
V. Principles and Trends in Case Law
VI. State by State Survey of Legal Standards

Leon Gold
Retired Partner
Proskauer Rose LLP
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