Accounting Firm Avoids Liability for Business Valuation
In the context of a business dispute a client added his accounting firm as a defendant alleging professional negligence. He complained the accountant’s business valuation failed to properly consider prior sales, resulting in a low value. The plaintiff claimed he first learned of the accountant’s potential liability during a deposition in the business dispute. Following the accountant’s dismissal based on statute of limitations’ grounds, the appellate court addressed two important aspects of accountants' liability: the scope of "accounting activities" for purposes of application of the two-year statute of limitations applicable to licensed accountants and the proper accrual date for the statute. The court found an accountant’s valuation work is covered under the two-year statute of limitations even though non-accountants can perform such work. It further held the client should have known of the claim at least as of the time he initiated the business dispute.