How to Avoid Fake Accountants!

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Startup businesses tend to focus more on income generation and building revenue streams. Money matters never end during the early days of a venture. So, most entrepreneurs allocate their funds on production and operational costs, leaving the financial management on the owner’s shoulders. However, as the money starts to flow, essential details tend to get overlooked as finances become more complex. Here’s an article on determining fake accountants, here’s how!


If there is one task business owners need to delegate, it is the accounting and financial aspect of their company. Every business—big or small, online or offline—needs a reliable accountant to count on, especially during tax season. Aside from preparing tax returns, they are also experts in all things finance; thus, helping you make valuable financial decisions for your company.


Putting so much trust in the hands of a person or a firm is a risky business, especially when it involves tons of cash. Since outsourcing and online transactions became a thing, getting scammed and duped for money also gained popularity (for the wrong reasons). It is understandable to want to protect your business from financial and accounting fraud that circulates the industry.



Here are quick tips on how to avoid fake accountants and other accounting fraud schemes.  


 Know your employees

According to the California Society of CPAs, the best way to avoid fake accountants is to establish control over the exposed areas of your firm, which includes employee acquisition. It is not enough to know workers on a personal level. It is important to screen them even before hiring them. Establish a routine when hiring new employees. Do a background check such as

  • Employment history
  • Character references
  • Criminal records
  • Diploma and credentials

Checking the credentials is especially vital for employees who handle your finances. Chartered Accountants (CA) are board-certified professionals equipped with legitimate licenses. To avoid a run-in with a fraud, always check their certifications before employing them. You can search through online directories of accounting organizations such as ICAEW and CPA PRO.


Delegate accounting duties

Since there is a shortage of human resources, small businesses tend to rely on one person to handle all their bookkeeping functions; thus, making them vulnerable to accounting fraud and theft. Accounting duties include

  •  Making bank deposits and statements
  •  Client payments and invoices
  •  Client receivables
  •  Managing Petty Cash

Giving a single person unrestricted access to your firm’s whole accounting system is a disaster waiting to happen. Even the most loyal employee is vulnerable to temptations, especially when faced with cash problems.

The smartest thing to do is to delegate financial functions to at least two CAs. Divide accounting and cash responsibilities so you can keep an eye on all the transactions happening. You can also opt to outsource the work to established accounting firms for peace of mind.


Maintain internal control over business processes

  •  Establish internal control by considering the following suggestions:
  •  Limiting employee access to financial accounts and other substantial data.
  •  Setting up “need-to-know” restrictions on accessing any financial-related information
  •  Limit access to your inventory, stock, and financial audits
  •  Establish a paper and audit trail to trace all financial transactions, online or offline.
  •  Impose a multi-person sign off when it comes to checks, expense claims, overtime, and payroll functions.

Establishing low-key security measures allows you to detect suspicious activity while also making an organized and systemized process.


Establish an ethical working environment

Treat all workers fairly and with respect, but do not be too trusting. Set a good example by staying professional and adapting ethical working habits. Arranged employee seminars and training regarding accounting fraudulence to educate them about suspicious behaviours and fraud activities.


If all else fails, it is time to get an expert to help you with your books and save you from internal fraud and fake accountants. Consult only with a trusted CA or an accounting firm’s top-grade services like Annette & Co. Receive expert assistance from a Chartered Accountant and Certified Profit First Professional today! Our social media channels and YouTube channel are also available to follow.


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Annette Ferguson

Annette Ferguson

Owner of Annette & Co. - Chartered Accountants & Certifed Profit First Professionals. Helping Online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.

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