REG Professional Liability · Updated November 2026
Negligence, Gross Negligence, or Fraud: How Bad Was the Accountant's Conduct?
Negligence is careless. Fraud is intentional. Gross negligence is a severe departure from reasonable professional care.
Ordinary negligence
Failure to exercise the level of reasonable professional care required under the circumstances. No intent to deceive is necessary.
Gross negligence
A much more extreme departure from reasonable care and, under some legal frameworks, can support constructive-fraud concepts.
Actual fraud
Fraud requires intentional or knowing deception and other applicable elements.
Third-party liability
Liability to nonclients can depend on jurisdiction, foreseeability, known-user standards, privity, or near-privity concepts.
The takeaway
Negligence is careless. Fraud is intentional. Gross negligence is the severe middle.
Related Summit guides
FAQ
Does ordinary negligence require intent to deceive?
No.
Does fraud require more than a mistake?
Yes.
Are third-party liability rules identical everywhere?
No.