Inventory Errors and Accounting Malpractice
If you are a small business in Washington DC, Virginia, or Maryland, you likely have inventory. Inventory is also known as your company’s goods that are on hand or in stock. They are viewed as current assets. Small businesses strive to find the right amount of inventory to avoid lost sales or high holding costs. Any errors made in calculating or recording your inventory could have drastic repercussions for your business. It could even result in the loss of a valued client or disruptions in production. If a trusted accountant made this error, accounting malpractice could have occurred.
Inventory errors are just one aspect of accounting malpractice. An incorrect inventory balance leads to errors in the calculation of the cost of goods sold. Therefore ultimately leading to errors in the calculations of gross profit and net income. If the mistake is not corrected, inventory errors have the opposite effect on the same factors in the following accounting period. (The ending inventory for the first accounting period is the beginning inventory for the second). Errors in inventory can lead to significant under or over-statements of the ending inventory valuation.
There are many errors related to inventory, which an accountant could conceivably make. The most obvious error is an incorrect physical unit count; however, there can also be incorrect units of measure, incorrect standard cost, incorrect part numbers, improper cutoff, or transfer imbalance. In many cases inventory errors are simply mistakes which the accountant will correct as soon as the mistake is known.
In a small business, inventory errors are more likely to be the result of sloppy or negligent practices on the part of the accountant. As an individual or owner of a small business, you hire accountants to protect your financial interests. In some cases, however, the person who is supposed to protect your money may end up costing you money. While inventory errors may not sound all that serious, in some instances they can cost you significant amounts of money. This often results in businesses and individuals being forced to bring in—and pay—another financial professional to straighten out the mess.
Other Types of Accounting Malpractice
In addition to inventory errors, accounting malpractice can include the following:
• Improper tax advice;
• Filing improper tax returns;
• Incorrect advice on accounting issues;
• Financial books which are poorly kept;
• Flawed audits;
• Failure to detect fraud;
• Failure to adhere to GAAS and GAAP standards, and
• Accounts receivable errors.
If you have been the victim of accounting malpractice, it is important to take immediate action to protect your rights. Speaking to a knowledgeable Washington D.C. accounting malpractice attorney can help you understand your options, while protecting your financial future.
Contact Accounting Malpractice Lawyers
At Patrick Malone & Associates, our accounting malpractice lawyers understand how financially damaging accounting malpractice can truly be. As experienced malpractice lawyers, we have represented individuals and small businesses in the Washington, DC metro area, Virginia, and throughout the State of Maryland. Our Washington DC accounting malpractice attorneys work tirelessly from the very start to ensure that all our clients receive the compensation they need to offset the wrongs that have been done to them. Call us at 1-202-742-1500 or 1-888-625-6645 or fill out our confidential contact form for a FREE Consultation and review of your case.
The accounting malpractice attorneys at Patrick Malone & Associates have successfully represented injured individuals in Washington, DC, Arlington, Alexandria, Annapolis, Rockville, Baltimore, Richmond, Fairfax, Montgomery County, Prince George’s County, and other locations throughout Maryland and Virginia.