What I am saying is that bookkeepers make lousy accountants and accountants make lousy bookkeepers. I have ver 20 years of experience with the day-to-day aspects a keeping "books". I know most of what I know because of trial and error, or because I have had the pleasure of working with some accountants who have taught me much. With their knowledge of how things are supposed to be in the financial statements, and with college level education, I have learned the nuts and bolts that I have found some actually don't understand down to the transaction entry level.
When my clients ask that question, I usually respond by saying that unless their accountant does their ongoing bookkeeping the accountant can only assume that the financial statements they are given are correct. For example, their accountant wouldn't know a $5,000 deposit into a bank account was recorded to income when it should have been recorded as a loan, unless they see the actual transaction. Yes, it's possible for someone to actually pay taxes on money received as a loan if it is not recorded properly, and no your accountant would not "catch it". If you want to pay your accountant to look at every transaction you have recorded for an entire year to make sure everything was done properly, I am sure they would be happy to charge you to do that.
An accountant should always catch the obvious. Liabilities on the Balance Sheet with a negative (debit) balance: a negative inventory balance: Cost of Goods Sold on the Profit & Loss statement that exceeds the Gross sales, etc.
That being said, I have seen educated and tested accountants put transactions into a "suspense" account because they don't know how to record a company owners' personal expense, or they aren't sure how to record a transaction between two companies owned by the same entity. That DOES make me suggest to my clients that they might want to consider getting a different accountant.
Where Quickbooks is concerned, I have stopped counting the number of times I have found entries that accountants have made to my clients Quickbooks file that may have made sense to the accountant, but are either unnecessary in Quickbooks or create a false sense of "correctness" because the accountant does not understand how Quickbooks works.
The Quickbooks Inventory feature is where I have seen this become most apparent. Inventory quantities in Quickbooks are directly tied to the behind the scenes transactions that the software records when everyday entries are made. When a journal entry is done to change the Inventory value after a physical count and manual valuation is done, but the quantities of the Inventory Items are not verified, the problems that have created the incorrect value will continue. The ultimate problem is that the year end financials, and ultimately the tax return may be incorrect.
I've also scene journal entries made to change the balance in "Sales Tax Payable". While the entry may correct the dollar figure on the Balance Sheet, the Sales Tax Liability statement will not be correct. The correction may also be made against what is due and applied to a single collection entity when it actually is a balance that involves both a state and local entities.
I believe it would behoove all Accountants to consider having a relationship with a Quickbooks expert. This should be a very experienced Quickbooks user or someone certified by Intuit, not an entry level employee who just graduated from college. They should find a contact that they would feel confident referring to their clients prior to actually needing their services. For the benefit of the client this will best ensure that the software is being correctly incorporated into the full accounting picture.
This material is for informational
purposes only and not intended and financial, legal or tax advice.
Please consult your finance, legal or tax professional to confirm the
accuracy of all information. Quickbooks is a registered product of
Intuit.
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