Day to day accounting can be a yawn. Routine reviews, expenses categorization, account reconciliations, tax filings…not very exciting stuff. But it is important and accuracy is meaningful.
Once in a while a client comes along who is not amused by the inspection of their Accountant and bucks requests for data and clarity. This can be immaturity in business or an attempt to hide something. As Accountants bear responsibility for accurate recording of financial data, a client who is uncooperative can be troublesome if not worrisome.
A good set of books requires transparency. That's a two way street. Accountants should be open about what they are doing and express concerns. The client should be open about all transactions, purposes for expenditures and of course logging all income.
At a point, concerns become suspicions when a client just flat out doesn't cooperate. This often is a sign of some hidden data or other shenanigans even illegalities. It gets to be more concerning if suspicion exists that one member or shareholder is pulling the wool over his fellow members/shareholders eyes. This could lead to a bit of detective work looking for things that might indicate embezzlement which can take many forms.
Accountants should not jump to conclusions and approach oddities with some caution. Even a tone of accusation can offend a client but when gentle inquiries get pushed back with bristled language I get suspicious. Maybe it's nothing or maybe it is devious. Details tell the story.
Like good detectives, you follow the evidence. If it doesn't pass the smell test, something is rotten. There does come a point when it might be best to resign an account. Keeping a paper trail of concern etc is smart too. You never know when you might be asked for your side of a story that unfolds later in the hands of a prosecutor.
Best,
Donn Marier
DM-Your Own FO