Whether you operate a small local business or an expansive multimillion-dollar corporation, safeguarding the financial health of your company is a top priority. 

However, because running a successful business is a complex venture involving multiple different parties, issues are bound to arise. It might be an internal dispute between business partners, a conflict with a vendor, or a customer complaining about a product or service. 

In some cases, those issues can escalate to the point where litigation is necessary—and when they do, having a certified professional accountant (CPA) on your litigation team will help to ensure a favorable outcome for your business

What is business litigation?

Business litigation focuses on legal action initiated by or against a business entity or specific individuals within that entity. 

Some of the most common business disputes involve breaches of contract, disagreements between partners and/or shareholders, allegations of intellectual property (IP) infringement, and employment disputes relating to discrimination, harassment, wrongful termination, and arguments over wages and benefits.

In each scenario, there will be a need to review extensive documentation to determine the financial impact of the legal action. Trained CPAs—especially those with forensic accounting credentials—can help remove some of the burden from your litigation team and utilize their expertise to help you build a stronger case

Where do CPAs fit in?

CPAs are a valuable asset at every stage of the business litigation process. 

Even during the pre-litigation stage, a CPA can provide assistance by examining any relevant financial data and estimating potential damages. Their accounting expertise can help the legal team determine whether or not it would be economically worthwhile to file a formal lawsuit or if it would be smarter to negotiate a settlement. 

If the legal team opts against a settlement, a formal Complaint will be filed to initiate the lawsuit and the parties will move forward with the litigation process. During this stage, CPAs become even more crucial. They will utilize their expertise in accounting, auditing, and taxation to analyze complicated financial data and help attorneys uncover a clear financial history–in many cases helping them avoid a costly trial for their clients

As a business litigation consultant, a CPA may perform a number of different tasks. These include: 

  • Calculating lost earnings and other damages in employment disputes
  • Damages calculations for commercial litigation
  • Analysis of financial records
  • Assistance with depositions
  • Property tax appeals
  • Tax court proceedings
  • Bankruptcy proceedings
  • Calculation of losses from fraud or embezzlement
  • Preparation of arbitration and mediation cases
  • Benefit calculations in support of disability, business interruption, and other insurance claims
  • Examination of commercial property CAM and BOE charges

In addition, CPAs are often asked to provide expert witness testimony in business dispute cases. Their ability to break down and explain detailed financial documentation in the courtroom is often pivotal to the outcome of the case. 

How do you find a qualified CPA? 

If you are searching for a qualified CPA to assist with business litigation, whether locally here in Austin or outside of Texas, first consider the scope of the case and the expertise you require

For example, if there are allegations of fraud or embezzlement, you will need a CPA with forensic accounting credentials to ensure they have the necessary investigative skills to identify financial misconduct. If you are dealing with mergers and acquisitions, partnership dissolutions, or shareholder disputes, you will likely need someone skilled in business valuation services

Once you have determined your needs, start your search by reviewing CPA firms in your area to evaluate whether or not they are a suitable fit. Read online reviews, check to make sure they have the correct certifications, and inquire about their experience with business litigation consulting. You may also want to consider their values and their professional approach to make sure they align with how you operate. 

A business litigation partner you can trust

Austin-based Mangold Anker Phillips, now part of Aprio, is a premier business advisory firm with over 100 years of combined CPA experience. As your trusted business litigation advisor, we provide comprehensive forensic accounting and litigation consulting services to help you manage risk and ensure a profitable outcome for your company. 

Call (512) 327-0909 for a free 30-minute consultation or email us at info@map-cpas.com to learn more.