As a business owner, you trust your accountant a lot. But what if that trust is mislaid?
It’s difficult to consider, especially when you have a long-standing relationship with someone, but that’s precisely when fraud and theft are most likely to occur. After all, someone can hardly defraud your company before they’ve established credibility.
Can you spot the signs of a problem accountant?
The most proactive way to approach the situation is to simply be alert to sudden changes in your accountant’s behavior and problems in their personal life. Here are some of the signs of trouble:
- You hear rumors that your accountant is having financial problems because they’re going through a divorce, have been gambling or for some other reason. Worse, they’re not particularly open or forthcoming with you about it.
- Your accountant suddenly seems to be hyper-involved with the company’s business in a way that they never were before. You find them coming in early (before anybody else is there) and leaving late (after everyone else has gone home).
- You notice that your accountant is “living large,” and it seems to be well past their means. The expensive car, flashy clothes and costly jewelry could all be a sign that they have engaged in some kind of grift.
- They’re getting cagey about their work. Phone calls are abruptly terminated when you walk in their office, papers are shuffled out of sight and — when you ask for reports — you seem to be getting incomplete information.
Naturally, it isn’t wise to make accusations without some kind of evidence to back up your claims — but your suspicions should lead to a internal forensic investigation. Your company’s future could depend upon it.
What if you find out that your company has been defrauded?
Ultimately, you may have to decide whether it’s better to pursue civil litigation over the fraud or file criminal charges. You may wind up doing both. Every circumstance is unique. Talking over your options with an experienced attorney is the prudent choice.