Top 3 Reasons CPAs Don’t Eliminate Owner Responsibility
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Top 3 Reasons CPAs Don’t Eliminate Owner Responsibility

At Gurian CPA in Dallas, it is fairly routine for accountants to work with clients on managing their books and making sure tax payments are made. The firm’s CPAs also offer tax and business growth advice as well. That is what CPAs do. CPAs are not just bookkeepers; they are accountants with the extra knowledge and skills necessary to offer tax and business advice.

Gurian’s CPAs say that sometimes new clients mistakenly believe that hiring a CPA eliminates any and all responsibility they have in managing company finances. Nothing could be further from the truth. A CPA is a partner of sorts, but he or she does not own the business in question. He or she does not have authority to make business decisions or to control company finances.

If you are a small business owner assuming that hiring a CPA will mitigate all of your responsibilities, here are the top three reasons to rethink things:

1. Accounts Don’t Reconcile Themselves

Imagine having a bookkeeper on staff tasked with entering all accounting information into company software. That same information is accessible to the company’s CPA firm. On the other end of the computer system is an accountant tasked with making sure finances are in order and taxes are paid. He or she can only work with the information provided.

If the bookkeeper is not accurately recording all the necessary data, the CPA is left in the dark. If that same bookkeeper is not reconciling accounts at the end of every month, there is no way for the CPA to know whether or not things are as they should be.

In simple terms, it’s still the responsibility of business owners to go through accounts to make sure everything is entered and the accounts are reconciled against bank statements. This is not something the accountant can do by him or herself. It has to be a joint effort.

2. Fraud Can Still Occur

Small business owners who turn over their books entirely to their CPAs without ever checking anything are opening themselves to fraud. Thankfully, the vast majority of CPAs are trusted individuals who would never think of defrauding clients. But that’s not to say it cannot happen. It can, and it does.

Even when a CPA can be fully entrusted – which is most of the time – we go back to the previous point of the accountant only being able to work with the information provided. It is entirely possible for a company employee to perpetrate fraud without a CPA ever knowing it. Therefore, it behooves company owners to routinely check bank statements, credit card statements, and so on to ensure no one is stealing from the business.

3. Businesses Don’t Grow on Their Own

Third, a business will never grow on its own despite the most sound advice offered by a CPA. Growth only occurs when business owners and managers work together to come up with and implement the right kinds of growth strategies. All an accountant can do is manage the books, make tax payments, and give the right kind of advice. If ownership and management do not act on advice, growth will be fleeting.

At the end of the day, a CPA can be a very valuable partner in managing the company’s finances. A trusted CPA firm handles tax issues and general accounting from a management standpoint. But even the best firm is no substitute for business owners taking responsibility.

The business owner is ultimately responsible for his or her company. Therefore, keeping tabs on all things accounting is still a necessity. That is just the reality of business ownership.