Are you familiar with the expression “it doesn’t add up?” In a nut shell, that describes accounting malpractice. It’s often accounting that doesn’t add up or follow the rules. Tax attorneys, certified public accountants (or CPAs), enrolled agents, public accountants, and bookkeepers interpret those rules for those of us who don’t have a background to know the rules or how to apply them.
Most people understand that Einstein wrote a formula e=mc². Very few people understand what that formula means or know how to use it. But, most know that the formula was the basis for scientists to create the Atomic Bomb. When bad accounting blows up on you, it can become apparent that something terrible has happened… just not necessarily why.
Bad accounting led to the end of the giant law firm Jenkins & Gilchrest. Bad accounting let Enron grow larger than it had any right to grow, and once exposed, the pyramid fell in on itself bankrupting many. Investors put their life savings into Enron, which was often based on the accounting of the former “Big Five” firm Arthur Anderson LLP. Bad accounting can protect pyramid schemes from detection. Bad accounting let Bernie Madoff steal billions.
Bad accounting can take many forms. Adding up numbers incorrectly. Making up fake numbers. Deliberately or incompetently putting the numbers in the wrong column. Giving legal and accounting advice that is highly speculative when you need concrete answers. Or worse, they lie in order to get or keep your business.
Sometimes you can fix the problems caused by a bad accountant… and sometimes you can’t. Unfortunately, often an accounting malpractice suit is the only route left for you to try to become whole again after the resulting financial destruction or even a criminal tax indictment. Contact us for more information.