Strategies for litigation risk control. May 1989 Strategies for litigation risk control. In today's world, anyone who performs a professional service is a prime candidate for a lawsuit. The accounting profession is no exception.
Users tend to expect more from the accountant's report than it sets forth.
The business community's perception is that accountants should be white collar security guards and spot financial fund, irregularities, and business failure which would result in material misleading financial statements. Compliance with professional pronouncements and conducting oneself in an ethical as well as professional manner is the foundation to limiting liabilities, but by itself may not be enough. The environment in which accountants operate today is a highly litigious one. Recent court cases have broadened the accountant's liability to certain third parties. In some jurisdictions these parties can be anyone relying on the accountant's report for unlimited amounts for an unlimited time.