Is It Typical for an Accountant Not to Provide Adjusting Entries for a Corporation?
Introduction
I’m reaching out to see if anyone else has experienced what I’m currently going through. I’ve been working with the same accountant for several years, but I’m beginning to question whether my experience is typical. The absence of adjusting entries is complicating my work.
Expectation vs. Reality
In my understanding and from what I’ve learned, receiving adjusting entries at the end of the year is standard practice. Unfortunately, my Bookkeeping mentor hasn’t encountered a situation like this before, so I’m without guidance on what to do next.
Seeking Clarity
I’ve requested these entries twice from my accountant, but his response has been vague—simply stating that he doesn’t prepare them. I’m left wondering why that might be the case and if it’s something I should be concerned about.
Personal Efforts
I’ve managed to handle the adjusting entries for asset depreciation independently using the balance sheet he provided. However, I’m uncertain about other potential adjustments that might be necessary.
If anyone has insights or has dealt with a similar situation, I would truly appreciate your advice.
One response
It sounds like you’re in a bit of a tricky situation with your accountant not providing the adjusting entries you need. Here’s a detailed explanation of what’s typically expected regarding adjusting entries and some reasons why your accountant might be holding back, along with suggestions on how to proceed.
What Are Adjusting Entries?
Adjusting entries are a crucial component of the Accounting cycle, particularly in the accrual basis of Accounting. They ensure that revenues and expenses are reported in the period in which they are earned or incurred, aligning with the matching principle. These entries are normally made at the end of an Accounting period and can include:
Should Your Accountant Provide Adjusting Entries?
In typical practice, an accountant (especially one preparing financial statements) should provide adjusting entries. They are essential for accurate financial reporting, ensuring the financial statements reflect a true and fair view of the company’s financial position. Your accountant’s reluctance to provide these can be unusual, especially if they are involved in preparing year-end financial statements.
Possible Reasons Why Your Accountant Isn’t Providing Them
Misunderstanding or Miscommunication: It could be a simple miscommunication. Make sure both you and your accountant understand what is expected. Clearly outline your needs in writing.
Scope of Work: Review your engagement letter or contract to ensure that preparing adjusting entries falls within the agreed-upon services. It might be that they don’t see it as part of their responsibilities due to how services were outlined initially.
Lack of Expertise or Overload: Although less likely, especially if they’ve prepared your accounts in the past, the accountant may be overwhelmed or lack specific expertise in certain types of entries, though this is rare in professional practices.
Waiting for Complete Information: Your accountant might be waiting for additional information before making the adjustments, though they should communicate this with you.
Steps You Can Take