Protection of Accounting Firms

When a client or non-client is unsatisfied with the outcome of a financial transaction, accounting firms often become the target. These disputes often arise in high-stakes contexts, including:

• Professional negligence suits: Claims that the firm failed to meet professional standards in financial reviews.
• Fraud-related disputes: Cases where accountants are accused of aiding or failing to detect fraud.
• Client disputes: Allegations of misconduct tied to advisory or consulting services.
• Partnership disputes: Cases where there is a partnership dispute and accountant is alleged to aid and abet their client in breaching a fiduciary duty.

Who are the ideal clients for this service?

• Accounting firms: Particularly those providing audit or financial advisory services to high-risk clients.
• Individual CPAs: Professionals accused of negligence or misconduct.
• Firms involved in litigation: Those seeking to mitigate reputational damage and financial exposure.

What legal services do clients need in this area?

• Defensive litigation: Representation in lawsuits alleging professional negligence, breach of fiduciary duty, or failure to detect fraud during financial reviews
• Third-party liability counseling: Addressing situations where accounting firms face claims from third parties, such as investors and client’s partners, who allege reliance on work rendered by the firm.
• Respond to subpoena: Responding to subpoenas and assisting accounting firms in complying with confidentiality requirements. Defending accountants when they are asked to testify in litigation to avoid accountants being named in the lawsuit.
• Contractual and client engagement reviews: Assisting firms in drafting and reviewing engagement letters and contracts to clearly define the scope of services and limit liability exposure in potential disputes.

Assistance with Compliance

On a highly confidential basis, we perform audits of the securities holdings held by the accountants to ensure that no restricted securities are owned and the accounting firm can confidentially confirm its independence.

Accounting firms face unique challenges when navigating disputes involving their clients’ actions. If you identify potential clients or cases involving these issues, please contact Melissa A. Peña at mapena@norris-law.com.