Most business professionals hire an accountant because they don’t want to handle their own books — or don’t know how.
Because there’s a lot of trust involved when you turn your business financials over to someone else, you may not have considered the possibility that your accountant would ever do anything improper with your account.
Would you really recognize accounting malpractice if you saw it?
Some of the signs that you may be a victim of accounting malpractice include the following:
- You notice that there are obvious mistakes with the numbers. While you may not know every penny that goes through your business, be conscious of the rough figures so you can spot anything that’s off.
- You get vague answers to concrete financial questions. If your accountant seems to say a lot of nothing in response to your questions and you always walk away more confused than when you started, that’s reason to worry.
- Accountants have professional principles they’re supposed to uphold when either auditing your accounts or preparing financial for your company. An accountant who seems to keep you in the dark could be hiding improper actions.
- Paperwork goes missing or isn’t filed on time. One of the things you pay an accountant to do is track your paperwork and make sure that all of your financial filings are done on time. If something goes missing or delays start happening without a good explanation, be concerned.
- You spot a mistake or dishonesty on your filings with the government and your accountant tells you that it’s okay. There’s never a good reason to break the law.
- Money seems to be missing from your accounts. Money is never “misplaced” or “lost.” If there’s money that can’t be found, you should be asking hard questions. It could be a sign of embezzlement.
- You ask for an independent audit by another accountant and your current accountant tries to block it somehow.
When your business has been damaged by an accountant’s professional malpractice, you may not have any way to recover your financial losses except through a lawsuit. However, you can’t begin your recovery until you first recognize that you have a problem. Temper your trust with a healthy amount of critical thinking and observation.
Source: FindLaw, “Accounting Malpractice: What You Need to Know,” accessed March 07, 2018