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Should you look for a new accountant?

On Behalf of | May 13, 2022 | Professional Malpractice |

You’re a creative type, a visionary and an enthusiastic entrepreneur – but you know your limits. When it comes to your growing business, you can’t handle everything at once, so you put your faith (and your financial books) in the hands of a trusty accountant.

Was your faith misplaced? You’re starting to notice some irregularities and an occasional problem with your interactions with your accountant. You’re concerned, but you don’t know if this is just normal “growing pains” or signs of a serious problem.

Signs of a problem accountant that should have you concerned

Everybody has problems in their lives, and mistakes happen. A single incident (unless it’s egregious) shouldn’t trouble you. Instead, you need to look for patterns and constant signals that tell you something is wrong.

Be worried about the situation when:

  • Your accountant has serious life issues happening. It’s not that they may be distracted by their family’s woes, but a health crisis, personal financial issues, hidden gambling addictions and the like can make someone desperate enough to embezzle.
  • Your accountant can’t (or won’t) explain the paperwork. Part of your accountant’s job is making your financial paperwork easy to follow. If they can’t explain to you – and demonstrate it on paper – what’s happening with the company’s money, you should be instantly worried.
  • Money is constantly being shuffled around. Sometimes you do need to shift money from one account to another for a while, but the frequent shifting of funds could signal the need for a closer look at what’s really happening. Your accountant could be incompetent – or they could be using the multiple transactions to hide their theft.
  • Your bills didn’t get paid on time. Again, it’s your accountant’s job to make sure your taxes are up to date, payroll is handled, and everything runs smoothly. If things aren’t getting paid, you need fast explanations.

The person who regularly does your books and puts your financial paperwork together for taxes and other payments is expected to abide by a code of ethics and professional responsibility called the Generally Accepted Accounting Principles (GAAP). When they fall short of those expectations, they can be held accountable for your company’s losses. Find out more about your legal options.