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Why Financial Statements are Sometimes Suspect?
By Dr. Gary L. Bode; CPA, MSA, CMP
Medical practice financial statements have potential problems and are often suspect for several reasons.
First, they rely on unverified information from the practitioner. A practice’s internal bookkeeping, even with the highest of intentions, is often sloppier than an accountant might hope for. Professional liability with the IRS, and time constraints, keep the average accountant from doing anything but merely compiling figures given them. The standard disclaimer on their financial statements states this fact.
Second, most accountants are generalists in that they service other industries, like hog farms and flower shops; besides health care. Specialization developed in medicine and health care for a good reason – it became too complex for a single person to have a comprehensive grasp on all of it. The accounting industry has not followed suite. Thus, CPAs often have little direct experience in the health care professional space.
Finally, accountants generally limit their scope of service to interfacing with the government for you on tax issues. Therefore, their statements reflect tax position, which is only one component of the practice’s total financial condition. While important, this is hardly all your accountant is capable of doing.
Now, have you ever experienced a problem relative to the above post?
Practice Mgmt: http://www.springerpub.com/prod.aspx?prod_id=23759
Financial Planning: http://www.jbpub.com/catalog/0763745790
Risk Management: http://www.jbpub.com/catalog/9780763733421
Hospitals: www.HealthcareFinancials.com
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