Do accounting errors & fraud really affect small businesses?... ABSOLUTELY!
Accounting errors and fraud undermine financial decisions, result in monetary losses and in some cases even force companies to close. Read the TRUE STORIES below to see how REAL small businesses are affected by errors and fraud every day.
Audit of County Government reveals high-dollar reporting errors
Errors, in some cases totaling millions of dollars, were the result of flawed reporting practices and a lack of checks and balances.
Link to Story.
An Analysis of the Underlying Causes Attributed to Restatements
The majority of restatements (57 percent) filed from 2003 to 2006 are attributed to internal company errors, inconsistent with the conventional wisdom that the complexity of the accounting standards drives most restatements.
Link to Story
Texan gets prison for $3.6 million embezzlement
Prosecutors say Simon used the embezzled funds to buy luxury items, such as a home, vehicles and jewelry, plus for gambling trips to Louisiana and Las Vegas.
Link to Story.
County hires CPA to double-check bookkeeping
“We don’t have enough staff and double sets of eyes looking at our numbers,” Commissioner George Raiter said before approving the contract.
Accounting errors could cost 60 employees their jobs
Although this example is from the public sector, the outcome from accounting errors is often the same… in the public and private sectors. Bad accounting data leads to bad business decisions.
http://www.mercurynews.com/peninsula/ci_13183700
The deficit was caused because of “internal accounting, tracking and analysis deficiencies”. The surprise $3.89 million deficit means 60 employees may have to be laid [...]
Mustang asking for more than $329,000 after billing oversight
Research has shown that most accounting errors result from simple mistakes. A great example ripped from the headlines…
http://www.dentonrc.com/sharedcontent/dws/drc/localnews/stories/DRC_mustang_0315.374d5285.html
“Over time, Mustang made some accounting errors and we actually underbilled them [customers].” What’s the cost of uncollected revenue?… missed opportunity, confused customers, tax implications? An ounce of prevention…
Importance of analyzing financial performance
Good lessons for any small business on avoiding problems that result from errors.
http://www.chiroeco.com/chiropractic/news/8504/1229/Importance-of-analyzing-financial-performance/
Without accurate, timely information, many business decisions run the risk of being made based on inaccurate information. Once you implement the necessary oversight and monitoring of your financial information, you know it is an accurate reflection of your business’ performance.
