Wednesday, 28 October 2020

Great accountants always look out for cooked books!

We all know that all companies manipulate their numbers to a particular extent. This is how they make sure that budgets balance. This is also how the executives score bonuses, as well as how investors continue offering up funding. All this is not something that you may be unaware of.

Therefore, it is important for investors to know how they can recognize the basic warning signs when it comes to falsified statements. Along with this, an accountant in San Antonio should be aware of what is going on, and never let something like this happen. 

accountant in San Antonio

In this blog, you can see a list of the ways that some companies use to manipulate their accounting practices. Here’s exactly what skilled and expert accounts in San Antonio, successfully look out for: 

1. Revenues that are accelerated - One of the common ways of doing this is by booking lump-sum payments as current sales when the services were actually delivered over the span of years. Take this as an example- a software service provider might be receiving an upfront payment for a five-year service contract. However, they may be recording the full payment as sales, for the particular period in which the payment was received. A reliable accountant in San Antonio would know that the better, correct, as well as a more accurate way, is to be amortizing the revenue over the life of the service contract, i.e 5 years. 

2. Expenses that are delayed - There have been a few companies who have been guilty of delaying expenses, while still in their first distributions. Those companies viewed this as a marketing campaign. They thought it to be a long-term investment that would capitalize on the costs. In this, they simply transferred the costs from the income statement to the balance sheet. This is where the campaign would then be expensed over a period of years. However, an account in San Antonio who knows from right to wrong would know that the more conservative as well as appropriate treatment would be to expense the cost in the correct period. 

3. Pre-merger expenses being accelerated - Now, this one may seem a bit counterintuitive, however, before a merger is absolutely completed, the acquired company will pay/possibly prepay, as many expenses as it is possible for them to pay. Later, post the merger, the EPS or earnings per share growth rate of the combined entity would be looking higher as compared to the past quarters. Moreover, the company will have already booked their expenses in the previous period. An accountant in San Antonio, who has quality experience would know what to look out for here!

Reading all that must have urged you to get an accountant in San Antonio who is skilled enough to spot such things, so that your company never faces a problem because of the books cooked wrong.

Moreover, there’s much more to it than you have just read.

You can find your answers, and a great accountant by visiting http://www.uhlenbrockcpa.com/ or contacting 210-701-1040.  


No comments:

Post a comment