Professional negligence is the liability theory most often referred to as an “accounting malpractice” claim. The elements of a professional negligence action against an accountant are similar to those present in any other type of negligence lawsuit.
Duty — the accountant must have owed the plaintiff a duty to use reasonable care in delivering accounting services.
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Breach of Duty — the plaintiff must show that the accountant failed to use that degree of skill and learning normally possessed and used by public accountants in a similar situation.
Damage — the plaintiff must show that he or she suffered damage as a direct result of the accountant’s breach of duty.
Causation — a causal nexus between the asserted breach and damages, such as a business driven into bankruptcy because it went into debt in reliance on overstated financial statements.