Printable Format1-402. Liability for professional negligence; restrictions. No person, proprietorship, partnership or registered firm authorized to practice as a certified public accountant pursuant to article 3 of chapter 1 of the Kansas Statutes Annotated, or any employee, agent, partner, officer, shareholder or member thereof, shall be liable to any person or entity for civil damages resulting from acts, omissions, decisions or other conduct amounting to negligence in the rendition of professional accounting services unless:
(a) The plaintiff directly engaged such person, proprietorship or registered firm to perform the professional accounting services; or
(b) (1) the defendant knew at the time of the engagement or the defendant and the client mutually agreed after the time of the engagement that the professional accounting services rendered the client would be made available to the plaintiff, who was identified in writing to the defendant; and (2) the defendant knew that the plaintiff intended to rely upon the professional accounting services rendered the client in connection with specified transactions described in writing.
History: L. 1987, ch. 1, § 1; L. 1995, ch. 152, § 11; July 1.
Law Review and Bar Journal References:
"A Practitioner's Guide to Tort Reform of the '80s: What Happened and What's Left after Judicial Scrutiny," Jerry R. Palmer and Martha M. Snyder, 57 J.K.B.A. No. 9, 21, 27 (1988).
CASE ANNOTATIONS
1. Statute does not violate § 18 of Kansas Bill of Rights; adequate substitute remedy for common-law action. Gillespie v. Seymour, 14 Kan. App. 2d 563, 575, 796 P.2d 1060 (1990).
2. Duty of accounting firm to client who decided on noncriminal financial strategy without informing firm discussed. Gillespie v. Seymour, 19 Kan. App. 2d 754, 770, 876 P.2d 193 (1994).
3. Considering and applying the liability parameters of a certified public accountant for professional negligence. Sparks v. CBIZ Accounting, Tax & Advisory of Kansas City, Inc., 36 Kan. App. 2d 660, 142 P.3d 749 (2006).
4. Statute of limitation of accounting claim is two years from when act causes injury or becomes reasonably ascertainable. First State Bank v. Daniel and Associates, P.C., 478 F. Supp. 2d 1278, 1283 (2007).
5. Firm not entitled to the liability restrictions in K.S.A. 1-401 because it never registered with board of accountancy. First State Bank v. Daniel and Associates P.C., 519 F. Supp. 2d 1157, 1160, 1161 (2007).