Part 1: Responsibilities and Liabilities
Any CPA in Kissimmee with tell you that the Big Four handle a great majority of audits for both private and public companies. They provide services for tax, advisory, assurance, actuarial, consulting, audit, legal issues, and corporate finance. The fact that they have been involved in scandalous cases is a reflection of what a CPA in Kissimmee has to deal with.
From individuals and businesses to complete governments seeking accounting professionals, there is no denying their position in the state economy. However, a CPA in Kissimmee is as likely to make a mistake, whether (intentional or unintentional), as other professionals.
Potential Exposures for a CPA in Kissimmee
An alleged or genuine claim for a single mistake on part of the CPA in Kissimmee can have serious repercussions for both their firm as well as the client. These can be data entry or accounting errors or they can be about their failure to follow the auditing standards and accounting principles that are accepted generally. Also, the failure to meet deadlines, maintain appropriate documentation, complete appropriate forms, do background research, perform peer review, and detect fraud can hold the same status too.
Since the opinions of a CPA in Kissimmee can influence the decisions of stockholders, investors, firm creditors, and partners by simply affecting their clients’ judgments, they can be sued for negligence and fraud in their performance of duties. It is important, therefore, to understand what is valid and what counts as exploitation.
Liabilities for a CPA in Kissimmee can be broadly categorized into two types: common law and statutory law. Where the former is about breach of contract, negligence, and fraud, the latter arises from a specific law or statute.
A breach of contract occurs when the CPA in Kissimmee does not perform in the manner they had initially agreed to in the engagement letter, making their client bear damages. A negligent CPA in Kissimmee fails to perform professionally or shows a lack of concern for the probability of the injuries that will follow. The third obligation from the common law liability, fraud, is a willful action to mislead the party, resulting in injuring it as well. On the other hand, statutory liability, covered by both the state and federal security laws, can hold the accountant as criminally or civilly liable.
The client and/or third parties have to prove the duty their auditors were to perform, the breach of that duty that they exercised, the losses incurred, and the causation they hold responsible. If the CPA in Kissimmee is able to prove that the breach, and the resultant loss, happened because of other variables and not their individual negligence, then they may be able to save themselves seeing how some states have room for contributory negligence while the rest attribute it to comparative negligence.
Professional Liability Insurance for Accountants
No, the law doesn’t require it. But it has been recommended by the American Institute of Certified Public Accountants that each firm makes sure they carry. It is meant to protect them in case a more complicated accounting or taxation task triggers costly litigation. Besides protecting the firm, the insurance would also seek to protect the client’s assets.
If you need more information about our Kissimmee, FL accounting and tax services, please contact us at 407-344-1012. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, Clermont, Davenport, Hunters Creek, Lake Nona, Celebration, Winter Park, Windermere, Dr. Phillips, Maitland, Altamonte Springs, Winter Garden, Ocoee, Apopka, Belle Isle, Edgewood, and Oakland FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin number, incorporations, and non profit 501c3 tax exempt. (Freedomtax’s accounting professionals are NOT CPA’s. CPA services provided by third party provider.)