Accountant Malpractice Expert

Independent auditors play a vital role in our capital markets system. A third party opinion on the representations made in a company’s financial statements serves as assurance of accuracy and transparency, and builds investor confidence.

While erroneous or even fraudulent financial reporting can occur even with a well conducted audit, the failure to comply with professional standards will typically make the auditors vulnerable. An understanding of auditing standards and auditor liability is thus needed to either defend or prosecute accounting professionals.

Click on the link to read more about our auditor liability expert services, including cases involving the interpretation of U.S. GAAP and IFRS, white collar defense, financial reporting fraud, securities fraud, complex securitizations, or derivatives disputes.

Barry Jay Epstein, Ph.D., CPA, CFFDr. Barry Jay Epstein, CPA, CFF, is a leading authority on auditor liability and financial reporting who has consulted and/or testified as an expert witness for plaintiff and defense attorneys in more than 140 cases involving securities litigation, white collar defense, financial fraud, CPA liability, and CPA malpractice.

Dr. Epstein served as the author of The Handbook of Accounting and Auditing, published by RIA, the tax and accounting business of Thomson Reuters, from 1998 through 2013. He also served as the lead author of 26 annual editions of Wiley GAAP (1985 through 2010), 14 annual editions of Wiley IFRS (1997 through 2010), and several other works on U.S. GAAP and international accounting standards, all published by John Wiley & Sons.

Dr. Epstein served as an accounting and auditing expert for the Securities and Exchange Commission in the “Potts decision,” which established that the QC or review partner has the same exact level of responsibility for the audit (and hence for audit failure) as does the audit partner.

The case was upheld by the full commission and then appealed to the Circuit Court in Minneapolis (where the audit failure occurred), which upheld the SEC verdict. Dr. Epstein’s testimony was specifically cited as a factor in the case outcome. Read the Initial Decision in the case Potts v. SEC, which contains multiple references to Dr. Epstein’s expert opinion.

Epstein + Nach LLC can help you prepare and explain complex accounting matters to the trier of fact in several ways. We are available to:

  • Screen thousands of documents quickly to identify crucial evidence
  • Draft cross-examination questions that are specific to your case
  • Provide technical on-site guidance during depositions
  • Prepare persuasive accounting exhibits for courtroom visualization

Read more about our Auditor Malpractice Services. You are invited to contact Dr. Epstein at 312-464-3520 or via email to discuss potential litigation charges involving auditor liability.

Read our Latest Auditor Liability Posts

Accounting for Leases: A White Paper on Significant Financial Reporting Changes for Lessees and Lessors,” by Dr. Barry Jay Epstein, CPA, CFF.
October, 2014

Converting Financial Statements from U.S. GAAP to IFRS,” by Peter Harris, Eva K. Jermakowicz, and Barry Jay Epstein. The CPA Journal, January 2014.

Revenue Recognition: A White Paper on Fraud and Financial Reporting Risk
November, 2014

Credit Impairment: New Fair Value Approach to Recognition of Estimated Losses Will Apply to Both Lenders and Other Financial Reporting Enterprises Holding Financial Assets
December 11, 2013

Accounting for Leases: Off-Balance Sheet Lease Arrangements About to Become Extinct, December 4, 2013

Continuing Evolution in Financial Reporting Poses Risks of Confusion and Conditions Ripe for Future Litigation, by Barry Jay Epstein, Law Bulletin Publishing Company, December, 2012.

Auditor Liability Litigation: 5 Planning Deficiencies that Lead to Audit Failures, by Susan Cheng and Barry J. Epstein, Westlaw Journal Professional Liability, Volume 22, Issue 5 / October 2012.

Fair Value Accounting: Finding the Middle Ground in the Mark-to-Market Dispute, by Natasha Perssico and Barry Jay Epstein, Accounting Today, July 31, 2012.

The Litigators’ Guide to Auditors’ Malpractice Liability: Internal Controls

 Alleged Olympus Accounting Fraud is Common Accounting Scam

MF Global Off-Balance-Sheet Accounting: Déjà vu All Over Again