Embezzlement is defined as “the act of dishonestly withholding assets for the purpose of theft by individuals to whom the assets have been entrusted”. Embezzlement is common in every type of business in Washington D.C.—from small startup companies to large corporations. When the embezzlement occurs because of an accounting error, auditor negligence, or accounting fraud, accounting malpractice may have occurred. In addition, a serious criminal act may have occurred, prompting local and even federal authorities to get involved and seek prosecution.
If you own a small business, you may have turned to an accountant to help you manage your books and inventory. You may have hired a CPA to help you during tax season and you may have even turned to an auditor to ensure that fraudulent activity or serious errors were not occurring. If embezzlement occurred because of shady accounting practices or if an auditor’s negligence failed to uncover embezzlement that was occurring, you may be able to file an accounting malpractice lawsuit against the negligent and responsible party.
How Common is Embezzlement and Accounting Malpractice?
Incidences such as these are far more common than you might think, and, in fact, accounting malpractice charges are on the rise. If you use an accountant to handle your payroll, ensure they are properly bonded. Never give unfettered electronic access to anyone over your business bank accounts. Have the accountant tell you in advance the amount needed to cover payroll, then transfer that amount to a payroll account. You likely hired a financial professional so you would not have to deal with your business finances.
Nonetheless, it is important that you periodically look at bank statements and reconciliations, make sure your taxes are being properly paid and that your financial books are in good order. While hiring an auditor is certainly a good idea, in some cases the auditor can be responsible for accounting malpractice as well. As the owner of a small business, you simply can’t afford to place your entire trust in another person, even if—or maybe especially if—that person is a financial professional.
The basic standards of care for the accounting industry are set forth in the GAAS, the GAAP and the Sarbanes-Oxley Act. Financial professionals must follow the guidelines set forth under these principles and standards. If your financial professional has engaged in fraud or misrepresentation then this may be the basis of liability against that person. Embezzlement and accounting malpractice can literally ruin your business.
If you believe that you have been the victim of embezzlement or accounting malpractice, it is important to know that the law is on your side. Speak to a skilled Washington D.C. accounting malpractice lawyer as soon as the evidence of malpractice comes to light.
Contact Accounting Malpractice Lawyers
At Patrick Malone & Associates, our accounting malpractice lawyers understand how devastating accounting malpractice can be for individuals and small businesses. As experienced malpractice lawyers, we have represented individuals and small businesses in the Washington, DC metro area, Virginia, and throughout the State of Maryland. Our Washington DC accounting malpractice attorneys work tirelessly from the very start to ensure that all our clients receive the compensation they need to offset the wrongs that have been done to them. Call us at 1-202-742-1500 or 1-888-625-6635 or fill out our confidential contact form for a FREE Consultation and review of your case.
The accounting malpractice attorneys at Patrick Malone & Associates have successfully represented injured individuals in Washington, DC, Arlington, Alexandria, Annapolis, Rockville, Baltimore, Richmond, Fairfax, Montgomery County, Prince George’s County, and other locations throughout Maryland and Virginia.