How a business owner protects finances

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ThecoffeeMan
Nov 28, 2016 04:56 PM 0 Answers
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The easiest way may be the most expensive. You can hire an auditor, usually a CPA to audit the records and determine if there are any discrepancies. Understand that there are always minor issues in any audit. Depending on the size of your business and when you began operating you could hire a new accountant to prepare the financial records to determine how they compare. This is even more expensive then an audit. There are lesser ways to check but each of the lesser ways increase the risk that you may not find an error or outright fraud. You state that this is a friend and you are concerned with the records. Why the concern? Have you taken any accounting classes or business classes. You need to determine which method is the most efficient. Clearly an audit will review some records not all but should be statistically within a range of error. Having the records created by a forensic accountant is an option if you feel there is fraud or you are concerned with the integrity of the records. All of these methods are costly. Do you have prior years records? Is there an account that looks off and others look the same or within the range of what you believe is accurate? Having a licensed accountant I am guessing is a CPA. It could be a CMA, a tax preparer. What type of license does your friend have? Is your friend honest. Just because your friends doesn’t mean someone is or is not honest or messing with the financial records. I would make certain in any business that you have internal controls in place to protect yourself from financial irregularities. This is only a staring ground. If you suspect your friend is not recording financial records then you may need new friends. Having a friend in business can also be a good way of ending your relationship. Are uyou getting a better rate. That’s not enough to use a friend as your accountant.

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