Through the turbulence of the recession and the upward tumult of the long bull market that’s followed, accountants and financial professionals have taken up a prominent place in the public eye. In part because of the involvement of accountants and accounting in high-profile trials and investigations, because of recent changes to federal and state tax laws and regulatory schemes, and other factors, accountants are making prominent appearances everywhere: in pop culture vehicles, in the op-ed pages of major newspapers — and, increasingly, in the crosshairs of the plaintiffs’ bar.
Goldberg Segalla’s Management and Professional Liability attorneys have defended and counseled accountants through decades of major changes in statutory and case law, market forces, litigation trends, and the scope and standards of accounting business operations. With a deep bench of respected trial attorneys drawing on decades of experience, our Management and Professional Liability team is the go-to practice for numerous Top 50 and super-regional accounting firms, and our attorneys are trusted counselors to some of the leading accountants and accounting firm executives in the business.
The Language of Business
Accounting is aptly called “the language of business.” We speak your language.
Goldberg Segalla stands as a nationally recognized leader in the defense of accounting professionals. Jonathan S. Ziss, chair of the firm’s Management Professional Liability Practice Group, is a sought-after lecturer on CPA risk management and professional standards compliance and a frequent columnist on the same topics, and has been involved in several hundred matters involving accountant professional liability issues.
The firm’s deep and ever-growing roster of attorneys who practice in this field includes a wide range of specialties, experiences, and skillsets, comprising leading publishers and speakers on accounting standards and professional liability litigation trends, veteran trial attorneys and long-time legal counselors to top accountants, and lawyers with professional backgrounds at Big Four auditing firms and other accounting and financial institutions. In addition, the firm’s collaborative culture allows us to draw on the resources and assistance of leading attorneys in fields like employment and labor, commercial litigation, e-discovery, cybersecurity and data privacy, and white collar crime and government investigations when issues in these areas impact or intersect with our accounting clients’ business.
The result is an unmatched combination of formidable defense, proactive risk management counsel, continuing education and analysis of legal and business trends, and the ability to navigate a wide range of inquiries and business-related matters for accountants and accounting firms on a local, regional, and national basis.
As a top-choice professional liability defense team, we regularly represent auditors, tax preparers, valuation professionals, business consultants, and other practitioners in sensitive and high-stakes litigation, at trials, and in all forms of alternative dispute resolution (ADR). Our record of successful defenses and favorable results rests on our extensive knowledge of the business of accounting, and our commitment to gaining an intimate understanding of each client’s operations, history, philosophy, and long-term goals. At the same time, we leverage outside resources and investigative experience to gain a parallel understanding of the plaintiff’s background and business, allowing us to master and mount a superior defense against each claim.
We have counseled and defended accountants and accounting firms in:
Lawsuits, brought by:
- Acquirers or sellers of business entities
- Bank and insurance regulators
- Bankruptcy trustees
- Banks and other lenders
- Investors in securities class actions
Investigations, led by:
- Bankruptcy trustees
- Creditors’ committees
- Department of Labor (DOL)
- Federal Bureau of Investigation (FBI)
- Grand juries
- Internal Revenue Service (IRS)
- Professional licensing bodies
- Securities and Exchange Commission (SEC)
- Public Company Accounting Oversight Board (PCAOB)
- State and local government entities
Our professional liability defense experience covers matters involving:
- Alleged errors and omissions
- American Institute of Certified Public Accountants (AICPA) disciplinary proceedings
- Audits — including failure to follow accounting standards in planning and performing audits, lack of cross-checks, and failures or errors that result in continuing fraud by a bookkeeper, CFO, manager/executive, or others
- Breach of fiduciary duty
- Charities and nonprofits — including failure to administer grants and gifts
- Company trusts — including failure to administer a company’s trust properly, and issues related to partner theft of client monies
- Errors in consulting
- Failure to advise a client of suspected fraud
- Failure to audit financial statements properly
- Failure to detect embezzlement
- Failure to file tax returns timely and/or file for an extension
- Flawed internal controls
- Fraud relating to the provision of accounting services
- Going concern opinions
- Loss of independence
- Malpractice claims related to incorrect bankruptcy filing
- Misallocation of expenses
- Misrepresentation of financial statements
- Poor tax advice or negligent preparation of tax advice (including failure to advise a client properly on the tax consequences of an estate)
- Technology — including improper selection, installation, and implementation of accounting software
As trial attorneys, we are all too familiar with the myriad ways that poor preparation and insufficient risk management measures can lead to costly results and settlements or otherwise jeopardize practices and reputations. We help accountants and firms adhere to professional standards and codes of ethics, including the Financial Accounting Standards Board (FASB) Generally Accepted Accounting Principles (GAAP), the AICPA Generally Accepted Auditing Standards (GAAS), and the International Federation of Accountants (IFAC) International Ethics Standards Board for Accountants (IESBA) Code of Ethics for Professional Accountants. But our counsel goes far beyond this, encompassing continuing education, client alerts on legal and regulatory developments, issue-spotting, as-needed risk-avoidance counsel, day-to-day operational advisement, and more.
Taking a proactive approach to risk management for all of our clients, we present continuing education on the Code of Ethics, as well as standard of care issues that often snare unwary practitioners. We regularly advise accountants and accounting firm executives on issues specific to the field that could lead to claims, including:
- Accounting for tax liabilities
- Balance sheet presentations
- Billing issues
- Communications with successor firms
- Conflicts of interest
- Discovery of client fraud and its aftermath
- Disengagements and non-engagements
- Employee defalcations
- Going concern disclosures
- Internal controls
- Inventory valuations
- Requests for comfort letters
- Return orders and fee applications in bankruptcy cases and related matters
- Revenue recognition
- SEC disclosures and PCAOB Auditing Standards (AU) Section 561 disclosures
- Unauthorized practice of law
- Will and trust issues
In addition to our frequent court appearances on behalf of accountants, we routinely counsel these professionals on matters affecting their day-to-day practice. With an intimate understanding of the business of accounting built on decades of defending top practitioners, we are also well equipped to offer counsel and other services related to business operational matters, including:
- Contract and engagement/disengagement letter drafting
- Employment matters, including employment discrimination claims, non-competition covenants, and employee handbooks
- Guidance on electronic documentation (with an eye toward ever-mounting e-discovery demands)
- Guidance on formulation of document retention policies
- Internal governance matters
- Navigating expanding scope of services
Accounting professionals are frequently subjected to third-party subpoenas and other inquiries related to civil matters, federal and state grand juries, and administrative actions. We understand the impact that these events can have on business — and the potential pitfalls and exposures that might arise as a result. We frequently handle, defend against, and guide clients through such inquiries, subpoenas, and third-party investigations, dispatching each matter with sensitivity, foresight, discretion, and diplomacy. Our clients can trust that we will take every available measure to protect them from risks and exposures, mitigate business interruptions, preserve their confidence with clear and prompt communication, and work collaboratively and strategically to eliminate or minimize reputational impact.