Accounting Malpractice as a Cause of Action in New York

In New York, individuals and businesses rely on accountants to handle financial matters with skill, accuracy, and integrity. When an accountant fails to meet the standards expected of the profession, and that failure causes financial harm, a legal claim for accounting malpractice may arise. This is a form of professional negligence, and like other negligence claims, it requires specific elements to be proven in court. A plaintiff must show both a deviation from accepted accounting practices and a direct link between that mistake and the financial damage suffered.

Departure from Accepted Professional Standards

The first element in an accounting malpractice claim is showing that the accountant failed to follow accepted professional standards. Accountants, like doctors or lawyers, are held to specific guidelines and practices that define what a competent professional should do in a given situation. These standards are developed by governing bodies such as the American Institute of Certified Public Accountants and are taught throughout the accounting profession.

To meet this element, the plaintiff usually needs expert testimony to explain what the proper procedure was and how the accountant failed to follow it. For example, an accountant may have filed inaccurate tax returns, failed to identify clear errors in financial statements, or overlooked key issues during an audit. Simply making a mistake is not enough. The error must reflect a clear departure from what other qualified accountants would have done in the same situation.

The Breach Must Be the Direct Cause of the Harm

The second element is causation. The plaintiff must prove that the accountant’s mistake was the direct reason for the financial loss. It is not enough to show that an error was made if the client would have lost money anyway for unrelated reasons.

For example, if an accountant gives incorrect tax advice and the client is penalized by the IRS as a result, that may establish causation. But if the client was audited for unrelated reasons or ignored the accountant’s advice altogether, the claim may fail. The courts look for a clear and direct link between the professional’s error and the injury that followed.

Conclusion

Accounting malpractice in New York is not about punishing professionals for simple errors. It is about holding them accountable when they fail to meet the standards of their field and cause measurable harm. To succeed in a malpractice claim, the plaintiff must show that the accountant’s actions fell below accepted standards and directly led to the financial loss. This ensures that only serious, well-supported claims move forward, while protecting both clients and professionals through clear expectations.

Find the Law

“A negligence claim for accounting malpractice requires the plaintiff to establish that the accountant departed from accepted professional standards, and that such breach proximately caused the injury to plaintiff. (Hamilton Textiles v Estate of Mate, 269 AD2d 214 [1st Dept 2000]). ” Vital Spark Found., Inc. v. N. Am. Globex Fund, L.P., 2013 N.Y. Slip Op. 30223, 18 (N.Y. Sup. Ct. 2013)