When Does A CPA Need To Hire A Lawyer?

The field of public accounting requires a high degree of professionalism and integrity. It is a profession held in high regard, and it takes years to earn certification as an accountant. However, even the most honest and trustworthy accountants face legal problems.

If you’re a certified public accountant (CPA), there are many times when you’ll need to hire a lawyer. For instance, if you’ve been accused of committing fraud or other crimes against your clients, hiring an accountant defense lawyer to represent you in court is highly recommended.

What Is A CPA?

A certified public accountant (CPA) is a licensed professional who provides accounting services and financial management to the public. Before becoming certified, CPAs must take an exam and meet specific educational requirements.

The designation of CPA allows accountants to practice in any state within the United States and other countries, although some states have different laws that limit their scope of work. Furthermore, CPAs are held to a high ethical standard and must sign an oath agreeing not to perform illegal acts while working for their clients.

What Does A CPA Do?

CPAs work in many different industries and professions. Some work for government agencies such as the Internal Revenue Service (IRS) or state tax offices. Most of them work for accounting firms, but others are self-employed or work for corporations. They provide a wide range of services. They mainly offer financial advice, audit companies’ records, and perform many other accounting-related services. Thus, they may work as accountants, auditors, or financial advisors.

When Do CPAs Need Lawyers?

Most people think accounting and law aren’t interdependent, but that’s not true. Most CPA professionals may not be aware of the legal aspects of their work. However, they must be mindful of this and find a lawyer to help them navigate legal issues. Below are situations in which a CPA will need legal services.

1. During Auditing

CPAs are subject to audit by the IRS and state taxing authorities. They may also face auditing probes from organizations that regulate their profession. Therefore, they need to prove their work is accurate and up-to-date. If they don’t, they could face fines or even jail time over things like tax fraud or money laundering.

You may be investigated if an audit reveals that you’ve made mistakes or haven’t been following some standards. While the outcome of such an investigation can be favorable or unfavorable, the process doesn’t have to be one-sided. You must be involved by engaging an attorney to oversee your rights.

2. During Tax Investigations

If you’re under investigation by the IRS, you must hire a tax lawyer. Even if you think you have done nothing wrong but want to get some advice from an expert, it’s best to consult with one. For example, if you have clients who have been not reporting their income and getting away with it for several years, and now the IRS is after them, you might be included in that investigation.

The IRS has a lot of power and often uses that power to go after CPAs. The IRS may believe that you’ve made a mistake on your client’s taxes, or they may think that you are hiding something. If this happens, don’t try to handle the situation yourself; you must hire a lawyer immediately.

3. During Business Litigation

Hiring an attorney is critical if you are a CPA involved in a lawsuit. The best way to think of this is as a business decision: A lawyer can help you reach an agreement faster and with less expense than if you tried to handle the case independently.

You should also consider hiring an attorney if someone threatens legal action against your firm. You need an attorney if you are in a business dispute or being sued for breach of contract or fraud. Moreover, if your business faces legal action, you should contact a lawyer immediately to help defend your rights and protect your company.

4. During Regulation

The IRS and state taxing authorities have several rules that CPAs must follow to avoid trouble. These rules cover everything—from how your firm handles money to how you interact with clients. The laws protect the public and their clients and ensure that CPAs offer high-quality service. Failure to follow them can lead to investigations by state licensing boards or criminal prosecution. CPAs should hire an accountant defense lawyer if they face an investigation by their state or local licensing board or are charged with a crime related to policy regulations.

5. During CPA-Related Criminal Law Matters

When a public accountant is involved in CPA-related criminal law matters, hiring a lawyer to represent them would be best. Public accountants are often required to report fraud, embezzlement, and other illegal activity to the authorities. The public accountant may be called upon to testify at a trial against someone who has committed these crimes.

The public accountant’s testimony could be used to convict or acquit another person of these crimes. If you are a public accountant and have been asked to testify in this case, you must understand your legal rights and responsibilities before agreeing to testify. Thus, you should consult an attorney before agreeing to testify against another person.

Conclusion

From criminal defense to fraud investigations and more, CPAs can benefit from the legal guidance of an accountant defense lawyer.

A lawyer is also helpful in situations where you’re unsure whether or not you need one. If you have questions about whether or not your situation requires legal counsel, it’s best to speak with one as soon as possible.

While there are certain circumstances where you may not need a lawyer, the vast majority of situations will require the assistance of a professional legal team. Did you enjoy this business blog? If so, scroll down to read more related articles or leave us a comment.