Question

List three claims, accounting firms in order to prevent claims in negligence proceedings.

Answer 1

Three claims are as follows:

Duty of care
An Accounting firms may owe various duties to the claimant. Sometimes this will be obvious, for example where there is a written retainer or agreement between a firm and a client. However, there does not
always need to be a written agreement and a professional holding himself or herself out to have particular expertise and advising the client may be assuming duties towards the client.

Breach of duty
An Accounting firm who gives advice which later turns out to be wrong is not necessarily negligent. The claimant will need to demonstrate that the professional fell below the standards of a reasonably competent professional, having regard to the standards normally expected in his profession. If there is a difference of opinion within the profession as to the correct practice, the professional will be able to demonstrate that he has not breached the duty of care if he can show that he acted in a way which was regarded as proper by a reasonable body of professional opinion.

Causation

One of the most important hurdles for the successful client is to demonstrate that he has suffered loss as a result of the negligence of accountant. He may have been negligent, but if this did not cause the loss, then there will be no claim.

The following matters should be kept in mind:

a. Before carrying out any work for a client, an accountant professional should ensure the exact duties to be performed by him, and matters to be excluded agreed with the client in writing. Any additional dutiesto be performed at a later date, should be defined in writing.

b. In giving advice at the request of a client, the accountant professional should make it clear that such his advice is subject to certain limitations.

c. When publishing documents professional may include in the writing document a clause relating to disclaiming liability.