The answer to that question is: not on the date that an accountant/auditor submits a draft copy of a report that becomes the basis for the client’s* malpractice claim against the accountant/auditor.
In Sirius XM Radio LLC v. Adeptus Partners, LLC (2025 NY Slip Op 34214(U), Index No. 654079/2024), the court issued an opinion stating that the statute of limitations for a malpractice claim against an accountant/auditor commences “at the latest, on the date [the accountant/auditor] delivered its last report to the [client].” In fact, the court affirmatively rejected the account/auditing firm’s argument that the statute of limitations is triggered on the date that the accounting/auditing firm submitted to the client the first draft audit report (of the amount of royalties owed to the client by an unrelated third party).
The court’s conclusion is based on the following recitation of precedential law:
The statute of limitations for accountant malpractice, whether the underlying theory is in contract or tort, is three years (CPLR 214[6]). ‘A malpractice cause of action sounds in tort and, therefore, absent fraud, accrues when an injury occurs, even if the aggrieved party is then ignorant of the wrong or injury’ (quoting Ackerman v. Price Waterhouse, 84 NY2d 535, 541 (1994)). ‘In the context of a malpractice action against an accountant, the claim accrues upon the client’s receipt of the accountant’s work product since this is the point that a client reasonably relies on the accountant’s skill and advice and, as a consequence of such reliance, can become liable for tax deficiencies.’ Id.
*In this particular case, the party that claimed malpractice against the accounting/auditing firm (“claiming party“) was not the direct client of that accounting/auditing firm. Instead, the claiming party received the accounting/auditing firm’s royalty report through an intermediary who represented the claiming party. The court found that “[a]lthough there was no [direct] accountant/client relationship, between [the claiming party and the accounting/auditing firm, [the claiming party] argued that [the accounting/auditing firm took on a duty owed to the claiming party] by entering ‘a special, beneficial relationship with [the claiming party] by holding themselves out as a Qualified Auditor to perform an independent audit of [that party’s] 2018 royalty payments according to GAAS.’”