A new Web site, www.accountingmalpractice.com has surfaced with the goal of providing accountants with information they can use to protect themselves against potential malpractice claims.
The site, just three months old, was developed by Mark Cheffers, CPA, formerly of PricewaterhouseCoopers. Resources available at the site include:
- A library of 250 malpractice cases filed against accountants, including court documents pertaining to the cases
- Reports on liability risks, issues, and trends involved in accounting for specific industries
- Malpractice Primer, an eBook account of the emerging liability standards
- CD-ROM video presentations regarding malpractice exposure and discussions on strategic planning
Three to four thousand malpractice claims against accountants are filed annually. It is estimated that one out of every 120 accountants is sued each year. Such claims were rare before the 1970s.
According to a recent report, reasons for the increase in malpractice claims include:
- Juries are starting to hold accountants to higher standards.
- Investors are looking for ways to recoup investments that have gone sour.
- Companies face more pressure to alter financial records in an effort to meet Wall Street's profit expectations.