Even as easy as Outright is to use, a great number of self-employed individuals still depend on outside accounting and financial professionals to help them with managing their finances and preparing tax returns. One of the personalty traits of us accounting professionals is we tend to be “rule followers,” but that does not mean their can’t be a bad apple in the bunch every now and then. To help you avoid the pain and possible loss from dealing with an unscrupulous financial professional, here are five warning signs your accountant may not be looking out for your best interest.
- Delivering excuses instead of results-Look we all get busy and sometimes we miss deadlines, but if your adviser is consistently giving you excuses why something is not completed or not available, that should be a huge red flag that things may not be on the up and up.
- Lack of credentials-Looks for letters after the person’s name. Some examples are CPA-Certified Public Accountant, EA-Enrolled Agent, CFP-Certified Financial Planner or CB-Certified Bookkeeper. Becoming certified does not guarantee honesty, but it at least tells you a professional organization or government entity has checked out the individual you are dealing with.
- Lack of professional associations-All of the credentials in #2 also qualify individuals to join one or more professional organizations such as the American Institute of CPA’s (AICPA). Membership in these organizations require that the individual comply with a code of professional conduct, and failure to do so should result in that person loosing their right to be a member.
- Not asking you to review a statement or tax return-Sure you hire the professional to know the detail about what goes in your financial statements and tax returns, but you are still ultimately responsible for the result. It is your business and you should at least know enough to tell if the information presented looks reasonable. If your accountant just wants you to sign a return and is not open to questions about what is in it, that is often a sign they have something to hide.
- Refusing to work with other outside professionals-Hopefully you have a team of outside professionals including accountants, bookkeepers, bankers and advisers you work with. If one is unwilling to work with your other outside professionals, it may be they fear the other professionals having the knowledge to question their unscrupulous numbers and activities.
Often the path to financial success for a self-employed person is to bring in outside help and share your deep dark financial secrets with them. I hope you never have to deal with an unscrupulous accountant or financial adviser, but keep in mind that if something doesn’t pass the “smell test,” you have every right to ask questions. It is your money after all.