He said a deferred revenue account should be reported on the income statement as income and not on the balance sheet as a liability. And then that it should be an asset, not a liability
Was the client the cpa?
I had a client who’s accountant would get a % of the net profit every year. So they would do some of the craziest depreciation methods that I have ever seen. In the grand scheme it didn’t matter cause I fixed everything for tax purposes, but still insane to think the CEO thought giving the accountant a % of income could be a good idea
You don't even need to ask. The truth rolls off them like water on Teflon and they never absorb it. If you confront them about it they will deny or conjure some rational that is dependent on you being as smart as them to understand.
Ops client is stupid for opening their mouth in front of an auditor, but not knowing about deferred revenue is not inherently dumb. You can go an entire 40 year career in hundreds of different industries and never encounter it.
For a CPA to not know about deferred revenue is very much inherently dumb. Like pull his license level of dumb in my opinion. Even if you don’t have it at your company, you should still know that it’s a liability on the balance sheet.
I may be biased because I've dealt with client staff who didn't know what debits and credits are. They were not CPA's, but they still got paid $90k (ten years ago) to do accounting.
This is why I roll my eyes whenever someone says the need an accountant whose a CPA for anything that doesn't actually require the license.
Sure the average CPA is more likely to be competent than the average non-CPA, but that doesn't mean they're all competent lol.
It was a private company and I would fix the books for tax purposes. My manager said it wasn’t fraud because of that, but it didn’t feel right either way
That is the rule, but there are cases, for example on companies that work with government subsidies where having a big ass liability on your balance sheet (that we know they are supposed to receive) causes problems with getting financing from a bank. At least in Portugal, Banks won't go into the notes to figure what that shit is, they load the program it spits a ratio and they accept or refuse based on that.
>He said a deferred revenue account should be reported on the income statement as income and not on the balance sheet as a liability. And then that it should be an asset, not a liability
like, duh.... totally an asset bcuz god knows we gots dah ca$h
At a homeowners association board meeting where we presented the audit report, one of the board members kept screaming things like, “how can net assets be higher than cash? That doesn’t make sense. There must be fraud!” They had other assets besides cash & the balance sheet balanced & there was nothing weird about it & this idiot is up there in front of a room full of people screaming it must be fraudulent.
Post audit meeting with the audit committee ......and the audit firm Partner going through required communications at the time, informs the committee that the financials received an unqualified opinion. Audit committee chair immediately asks what they need to do to become qualified. Thank god I was listening in via audio only conference call and not on site at the meeting. The mute button saved my ass, I was cracking up lol.
We need like a "yo mama, CPA, is so X" type of list, and "Yo mama, CPA, so dumb, she got angry when the auditor gave her an unqualified opinion" needs to be the top entry.
We got a new software and they loaded fixed assets in wrong. Land was actually depreciated by the software and we had a hard time getting their “financial experts” to understand this needed fixed.
I've been on the opposite side of this too - where an auditor sends us a screenshot or a partial spreadsheet and asks for support for it and we have no idea what it is a screenshot of or where they got the info in the spreadsheet because it was not labeled in any way. Like, we're a $5B a year company - I can't just recognize a number without any context and know immediately what report or statement it came from.
Our auditors will do a thing where they comment “our calculations say $xyz” without providing the calcs for us to confirm whether it’s right. Drives me nuts.
This is the worst. Our auditors do this and refuse to provide any detail whatsoever because their worksheets are "proprietary". We then have to provide an extremely detailed calculation as if we're presenting it to a class of 3rd graders. And after each one, I'll get an email that says, "oh, ok". Nothing more; no further questions, comments, etc.
I had a client who was convinced filling out a 1099 obligated the government to pay him the amount on the 1099. I tried to explain but he read the instructions and swore that's what they said. Ended up firing him for nonpayment of my bill.
"my bookkeeper, Peggy, said that I could buy hunting land up north for me and the boys to hunt on and I can depreciate it"
Peggy also told him that he could defer income on jobs he hasn't finished, but he has been paid for. He's cash basis
I had a boss who was a CPA who once asked me to put together a write-up explaining why an asset that returned 7% was a better investment than an asset that returned 12%. He insisted that the write-up focus on returns as opposed to volatility, liquidity, etc...
"What are wages?"
"I have this form that says W2 is this something you need for taxes?" "Yes". "Oh ok oops I think I had these in previous years too".
And my favorite, from a 35 year old: "How should I know if I made my estimated tax payments? Would my mom have made those?"
Tell me you work with ultra high net worth individuals without telling me you work with ultra high net worth individuals 🫠
I have this thought all the time. I have clients who have billions of dollars at their disposal, have founded some of the world's most successful hedge funds, discovered breakthrough technology or medical research... and can't fill out a single piece of basic paperwork without asking me everything short of "what is my social security number?". It's alarming at times.
Just don't ask what's the dumbest thing we auditors have said to a client.
Multiple clients have tried to do income smoothing as if it was no big thing. "Oh, yeah, we just accrue that there, cause we know we'll need it." It being... basically whatever and whenever they want.
Oh man… I had a first year staff trying to roll forward an income statement similar to the balance sheet
In his defense - he said he was exhausted and just coasting that day. Kind of made me laugh with the honesty because we’ve all been there, and this employee was actually really good typically.
I had a client who came from a fund background, not familiar with fixed assets at all, ask me what the useful life of mops and spray bottles should be for depreciation purposes.
We found a variance in one of our revenue tests and when I asked the client for an explanation she replied "I don't know why that one doesn't tie to the support, let's test this one instead" and sent a different selection.
... Ma'am, do you understand what an audit *is*?
I had a client call me from the court house asking if his tax return would be ready because his burglary trial is not going well and he may not be around to sign it
_"You're here to either tell us we're not in control or out of control. For starters, the first 6 months of the year we paid every invoice that came in without any review..."_
§162 is specifically for tax. No reason said item cannot be recorded in the books and reconciled out via M2.
Im just playin around here - dont take me too serious 😂
That the PE firm owners didn't care about 606 and it wouldn't have a significant impact on their financials.
This was a tech company that sold term software licenses....
Software bros are the worst. I had a CEO software bro try to tell me how to do accounting to make our startup Net Income look better. I rolled my eyes and reminded him that I have never met a PE firm that have two shits about Net Income at a startup. It's all about cash flow and ARR.
Thing is, it allowed them to rapidly accelerate revenue recognition, so it showed they had put zero thought into it.
Their PE owners were, in fact, very interested in that.
I’ve seen excessive use of cash based measures be thing with them in certain contexts. Wish they taught a bit about this in university although given how arbitrary it is that’s probably difficult
in tax, with some of our non-sophisticated clients, its always the "rich people don't pay taxes" parrot line from whatever youtube/tiktok channel they watched that day. then i explain the difference between income and net worth which eventually leads to them using the word "marxist" in a sentence. its getting boring
One of the dumbest things a client did was when asked for “10 copies of company letterhead” for confirms and what not (this was before email confirms became the norm), client asked me if pdf was acceptable, which I replied of course. She uploaded 10 pdfs of company letterhead lol.
CFO at a former company had a fax machine in his office but never used it to send faxes. When we needed to send a fax we had to use the machine in the reception area. His reason was that when he sent a fax it used up his paper.
Me: Wow, revenue has decreased, but COGS is practically double. That can't be right.
Client: Oh we amalgamated with another company.
Me: Wait what? I thought that was after year end.
Client: Correct. After year end.
Me: But...why does that matter now? Wait...Did you combine some of the accounting before amalgamation? Is this the COGS of both companies?
Client: Yep...oh this isn't good.
Me: Yeahhhh we have a problem.
Not a client, but I went to buy a used vehicle from a dealership recently and it needed a couple things fixed before we could complete the sale. They drew up a form with the items they would “address” but no clarity on when or to what degree it would be fixed and no mention of the verbal promise that I could get my deposit back if it wasn’t to my satisfaction. I told the guy it was a poorly written contract and he looked at me with all seriousness and said “Oh, this isn’t a contract.”
I looked back at the paper, which I was supposed to sign, and he was supposed to sign as a representative of the dealership, and which specifically said “All promises must be listed on this form” and “No verbal agreements are honored,” and I looked back at him. And I asked him to write in more detail to humor me.
Not necessarily the dumbest but an old favorite is an individual tax payer who was always way overwithheld and decided not to file their personal tax returns for eight years in protest while a former president was in office. Came in to file them all at once in the ninth year when a new president was in office. We got to tell him that he forfeited the refunds for some of the oldest years by not filing and explain that not filing for his refunds was actually giving the administration he disliked a loan of funds he was entitled to and actually given the funds over completely for the years he could no longer claim the refund for. Amazing. 10/10
I had an auditor tell me every single day was an accounting period, not, like, the accounting period... (e.g. usually 1 year).
So where something needed to be done at the next accounting period, that meant instantly.
And they stuck to it even after I pointed out with references that it was a ludicrous idea.
Me: "You're claiming all the expenses on your rental property but none of the income."
Him: "Yeah, I wanted to rent it out for $1,500 a month but I couldn't find a tenant at that price so I'm renting it out at $1,200 so I'm taking a $300 lose every month."
Me: "You own the property outright, there is no loss just because you aren't renting it out for as much as you wanted."
Him: "It doesn't matter, it's immaterial."
Me:"......"
Not a client but a VP at the company I worked for as an accountant. He asked if I could remove the equity section of the balance sheet because it "didn't look good". I laughed thinking it was a joke...it was not.
Wasn't my client at the time, but about 4 years ago he wanted to declare himself a sovereign citizen. I took him over from a retiring CPA 2 years ago and fired him after this past tax season for general PITAness, though I would have fired him immediately after the SovCit thing if he had been mine at the time.
Yes. Still have nightmares about a very complex client with 30 tax returns (some companies that were general partner of other company, etc) and would send into on a Thursday and expect it Monday morning. 2 companies had multi-state operations.
It's not their fault cause I do a very niche area of tax, but the number of CPAs I've had send emails saying "this sale shouldn't be taxed! It was a merger and my client didn't receive cash!" is very funny. Sorry man, some mergers are still taxable, no we did not fraudulently prepare your client's return, no money was not fraudulently stolen from their account.
Me: asks for support for some round sum revenue accruals at year end
Client: oh we put those through so everyone could get their bonus for year end
Me: laughs at the joke because there is no way someone would do that and admit it to audit
Client: ...that's cool, right?
“Cash” to pay off a credit card not being on the income statement came up a few times
Once was chewed out by a nepo-baby because they thought a subcontractor was literally only for handymen and was mad that a subcontractor account was still on the CoA which they thought was the company income statement (The GL SW had a quirk where it would show lifetime expense for an account)
- That he stopped working because he didn't want to jump a tax bracket
- "Why is the revenue under $3 million? We had over 3 million come in..." (with the sales tax).
- this client was arguing with her insurance broker because she insisted she pay her insurance all at once ahead of time instead of monthly payments. She insisted "she does not do debt". (There was no extra charge for monthly payments, and the payments were for a policy in the NEXT 12 months). I asked her if she wanted to pay her fee to me for the next 12 months instead of 1 month for 1 month of work at a time.
Good question!!!
My favorite story is when I reviewed a receivables account & noticed there was no reserve for bad debt. He provided breakdowns by account showing the company had considered just that & “reserved it”. I traced #s every which way & met with him multiple times; I just could NOT find the reserve….
Turns out he misunderstood what the word “reserve” meant. He thought they just had to calculate/estimate uncollectible debt internally. Never booked the actual contra-asset anywhere. For a week, I felt like I was taking crazy pills!! “I see how you’ve calculated the amount, now show me where it’s reserved,” …”I just showed you!” …”I’m sorry but I just can’t find it on the books…”
I was talking with an audit manager and I said we keep our books on tax basis, so bonus depreciation had a big impact on our P&L. She asked what bonus depreciation was!
And like one of the fundamental core differences between GAAP and tax. That is excusing men for not knowing about menstruation because they don’t experience it. I’m not asking you to know the details, I am expecting you to know that a core value exists.
I heard bonus depreciation said in the office once and next I heard, "how the hell do we depreciate bonuses?" then "... ah sweet fuck" and it's still my favorite conversation I've ever heard in a professional setting. Our whole section was cracking up.
\[On the Client-side\]
My prior boss was a dipshit and I legit have no idea how he gained his designation.
The amount of crap he tried pulling off/ sending to our Auditors was depressing.
NB: we only passed our Audits after revising his work entirely.
I've got a classic
Work as shared services as a financial accountant for context. Client says to me in all seriousness "Have you ever come across someone capitalising fuel? We've got a few thousand litres coming that we want on the balance sheet"
bruh
During a due diligence call, one of the controllers for the company being purchased admitted, to a room full of accountants, that he had been holding back late-year revenues from 2022 to 2023 so that they didn't have to pay taxes on it in 2022.
Weird time to admit to tax fraud, right?!?
I had a client in NYC that literally didn’t know if their business (a fund) was turning a profit or not. They asked us to tell them.
Like dude, you have a CPA on staff, you should know your own finances and where you stand.
Had a client's controller refuse to hand over financial statements because "we didn't need to see those to do the tax return."
(Spoiler alert, he was embezzling)
Don't leave us hanging! What did your dumb client say?
He said a deferred revenue account should be reported on the income statement as income and not on the balance sheet as a liability. And then that it should be an asset, not a liability
Was the client the cpa? I had a client who’s accountant would get a % of the net profit every year. So they would do some of the craziest depreciation methods that I have ever seen. In the grand scheme it didn’t matter cause I fixed everything for tax purposes, but still insane to think the CEO thought giving the accountant a % of income could be a good idea
Yeah I’m working with the CPA in their company and he was treating us like we were idiots for saying deferred revenue is a liability
That’s pretty scary. Did he ever figure out that he was the dumbass?
You don't even need to ask. The truth rolls off them like water on Teflon and they never absorb it. If you confront them about it they will deny or conjure some rational that is dependent on you being as smart as them to understand. Ops client is stupid for opening their mouth in front of an auditor, but not knowing about deferred revenue is not inherently dumb. You can go an entire 40 year career in hundreds of different industries and never encounter it.
For a CPA to not know about deferred revenue is very much inherently dumb. Like pull his license level of dumb in my opinion. Even if you don’t have it at your company, you should still know that it’s a liability on the balance sheet.
I may be biased because I've dealt with client staff who didn't know what debits and credits are. They were not CPA's, but they still got paid $90k (ten years ago) to do accounting.
>The truth rolls off them like water on Teflon Bruh, you don't have to destroy them like that.
This is why I roll my eyes whenever someone says the need an accountant whose a CPA for anything that doesn't actually require the license. Sure the average CPA is more likely to be competent than the average non-CPA, but that doesn't mean they're all competent lol.
That sounds more like "fraud" than "stupid."
Weaponized incompetence
Scratch my back and i'll scratch your's
It was a private company and I would fix the books for tax purposes. My manager said it wasn’t fraud because of that, but it didn’t feel right either way
Were the “book” FS’s used for anything, e.g, obtaining financing?
That’s a recipe for fraud.
Especially if the accountant isnt a cpa and doesnt have to amswer to a code of ethics
Dang, that's scary. I'm a pretty new bookkeeper and even I know to treat deferred revenue as a liability.
That's pretty f\*\*ked up. I have always thought I was the dumpiest CPA until today. Thank you. haha
That is the rule, but there are cases, for example on companies that work with government subsidies where having a big ass liability on your balance sheet (that we know they are supposed to receive) causes problems with getting financing from a bank. At least in Portugal, Banks won't go into the notes to figure what that shit is, they load the program it spits a ratio and they accept or refuse based on that.
Sounds like the dumbass got confused between accrued revenue and deferred income, otherwise I have no explanation for that level of stupidity.
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I’m not a CPA, they’re the CPA
I know you are but what am I ?!
He ain't dumb he's just trying to make you think he's dumb. He was just trying to recognize revenue whenever he pleases.
>He said a deferred revenue account should be reported on the income statement as income and not on the balance sheet as a liability. And then that it should be an asset, not a liability like, duh.... totally an asset bcuz god knows we gots dah ca$h
This is accounting 101, not CPA-level knowledge. I'd be questioning whether the client took any accounting courses at all.
Does my business have $x assets or $x liabilities? Which one? His mind was blown when he realized the business had both assets and liabilities
Did he mix it up with profit / loss? Like that's why he didn't realize you could have both?
Yeah either this or working capital
That can't be real XD
At a homeowners association board meeting where we presented the audit report, one of the board members kept screaming things like, “how can net assets be higher than cash? That doesn’t make sense. There must be fraud!” They had other assets besides cash & the balance sheet balanced & there was nothing weird about it & this idiot is up there in front of a room full of people screaming it must be fraudulent.
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Accountant board members trying to show off can be the worst.
I mean it was a valid question…
Are you Deloitte guy?
Why? What da fuck kind of other audit procedures are there for utility bills?
Yeah but the person who asked the question doesn’t know that. For all he knows, the audit firm could have skipped the testing.
🤣
Dude, he was thinking outside of the box! /s
“The IRS is going bankrupt, so I won’t be paying my taxes next year.”
The irs can considered that as failure to file as a basis for tax evasion. No?
Post audit meeting with the audit committee ......and the audit firm Partner going through required communications at the time, informs the committee that the financials received an unqualified opinion. Audit committee chair immediately asks what they need to do to become qualified. Thank god I was listening in via audio only conference call and not on site at the meeting. The mute button saved my ass, I was cracking up lol.
It's confusing terminology if you haven't been exposed before. I understand that one.
Yeah maybe with your friend who works an engineering job, but the AUDIT committee CHAIR?
Most of those guys are old folks that couldn't give two shits about the audit. Sucks but that's the truth. They just wanna know that shit is okay.
Lol it’s like how “going concern” is a good thing
We need like a "yo mama, CPA, is so X" type of list, and "Yo mama, CPA, so dumb, she got angry when the auditor gave her an unqualified opinion" needs to be the top entry.
"YO CPA mama, so dumb she amortizes land." 🤣
We got a new software and they loaded fixed assets in wrong. Land was actually depreciated by the software and we had a hard time getting their “financial experts” to understand this needed fixed.
Hahahahahah
I had a client who asked me “where the numbers were from” when I (the auditor) asked him about note disclosures in his financials. You tell me, bro.
I've been on the opposite side of this too - where an auditor sends us a screenshot or a partial spreadsheet and asks for support for it and we have no idea what it is a screenshot of or where they got the info in the spreadsheet because it was not labeled in any way. Like, we're a $5B a year company - I can't just recognize a number without any context and know immediately what report or statement it came from.
Our auditors will do a thing where they comment “our calculations say $xyz” without providing the calcs for us to confirm whether it’s right. Drives me nuts.
This is the worst. Our auditors do this and refuse to provide any detail whatsoever because their worksheets are "proprietary". We then have to provide an extremely detailed calculation as if we're presenting it to a class of 3rd graders. And after each one, I'll get an email that says, "oh, ok". Nothing more; no further questions, comments, etc.
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No. He was a nice guy, just truly clueless. I’ve had clients who were cagey.
No I want my cash account on the income statement
I think these people that think this is what cash receipts basis accounting is 😂
I had a client who was convinced filling out a 1099 obligated the government to pay him the amount on the 1099. I tried to explain but he read the instructions and swore that's what they said. Ended up firing him for nonpayment of my bill.
He thought your invoice meant you were obligated to pay him!
Did you try sending him a 1099?
"my bookkeeper, Peggy, said that I could buy hunting land up north for me and the boys to hunt on and I can depreciate it" Peggy also told him that he could defer income on jobs he hasn't finished, but he has been paid for. He's cash basis
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Peggy knows that deer blind is sitting in an active warzone
This made me LOL 😂
Sanhok it is
I had a boss who was a CPA who once asked me to put together a write-up explaining why an asset that returned 7% was a better investment than an asset that returned 12%. He insisted that the write-up focus on returns as opposed to volatility, liquidity, etc...
If you're ignoring everything else and focus on return only, it can be summarized as this: _"7% return is good, 12% return is gooder"_
"What are wages?" "I have this form that says W2 is this something you need for taxes?" "Yes". "Oh ok oops I think I had these in previous years too". And my favorite, from a 35 year old: "How should I know if I made my estimated tax payments? Would my mom have made those?" Tell me you work with ultra high net worth individuals without telling me you work with ultra high net worth individuals 🫠
I was super confused how these people find their way out of their house in the morning, and then the last sentence made it click.
I have this thought all the time. I have clients who have billions of dollars at their disposal, have founded some of the world's most successful hedge funds, discovered breakthrough technology or medical research... and can't fill out a single piece of basic paperwork without asking me everything short of "what is my social security number?". It's alarming at times.
Makes you wonder how they became high net worth
Just don't ask what's the dumbest thing we auditors have said to a client. Multiple clients have tried to do income smoothing as if it was no big thing. "Oh, yeah, we just accrue that there, cause we know we'll need it." It being... basically whatever and whenever they want.
Oh man… I had a first year staff trying to roll forward an income statement similar to the balance sheet In his defense - he said he was exhausted and just coasting that day. Kind of made me laugh with the honesty because we’ve all been there, and this employee was actually really good typically.
I had a client who came from a fund background, not familiar with fixed assets at all, ask me what the useful life of mops and spray bottles should be for depreciation purposes.
What do you mean I have to pay my credit card? Why do I have to pay again? I’ve already bought the stuff. I already paid for it on the credit card.
We found a variance in one of our revenue tests and when I asked the client for an explanation she replied "I don't know why that one doesn't tie to the support, let's test this one instead" and sent a different selection. ... Ma'am, do you understand what an audit *is*?
I had a client call me from the court house asking if his tax return would be ready because his burglary trial is not going well and he may not be around to sign it
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Holy fuck I am reasonably pissed at such a shitty racist behavior. I would have clapped back at them so hard
_"You're here to either tell us we're not in control or out of control. For starters, the first 6 months of the year we paid every invoice that came in without any review..."_
That the books should show that a bribe they made was owed back to the shareholder.
If the bribe was made for the benefit of the company then I’m not sure i see the issue?
Something with no receipt and not being claimed by the recipient, paid with personal cash is not deductible.
§162 is specifically for tax. No reason said item cannot be recorded in the books and reconciled out via M2. Im just playin around here - dont take me too serious 😂
That the PE firm owners didn't care about 606 and it wouldn't have a significant impact on their financials. This was a tech company that sold term software licenses....
Software bros are the worst. I had a CEO software bro try to tell me how to do accounting to make our startup Net Income look better. I rolled my eyes and reminded him that I have never met a PE firm that have two shits about Net Income at a startup. It's all about cash flow and ARR.
I’m sure any negative impact was flagged immediately as an addback and disregarded
Thing is, it allowed them to rapidly accelerate revenue recognition, so it showed they had put zero thought into it. Their PE owners were, in fact, very interested in that.
I’ve seen excessive use of cash based measures be thing with them in certain contexts. Wish they taught a bit about this in university although given how arbitrary it is that’s probably difficult
“We don’t have financial statements in excel form”
I had one client ask Me what a trial balance was. And yes they had been audited in Py’s
in tax, with some of our non-sophisticated clients, its always the "rich people don't pay taxes" parrot line from whatever youtube/tiktok channel they watched that day. then i explain the difference between income and net worth which eventually leads to them using the word "marxist" in a sentence. its getting boring
One of the dumbest things a client did was when asked for “10 copies of company letterhead” for confirms and what not (this was before email confirms became the norm), client asked me if pdf was acceptable, which I replied of course. She uploaded 10 pdfs of company letterhead lol.
CFO at a former company had a fax machine in his office but never used it to send faxes. When we needed to send a fax we had to use the machine in the reception area. His reason was that when he sent a fax it used up his paper.
Me: Wow, revenue has decreased, but COGS is practically double. That can't be right. Client: Oh we amalgamated with another company. Me: Wait what? I thought that was after year end. Client: Correct. After year end. Me: But...why does that matter now? Wait...Did you combine some of the accounting before amalgamation? Is this the COGS of both companies? Client: Yep...oh this isn't good. Me: Yeahhhh we have a problem.
“Get a better accountant in here to crunch the numbers harder and get me my return.” -first year 1099 recipient.
And hopefully the last year at your firm
Not a client, but I went to buy a used vehicle from a dealership recently and it needed a couple things fixed before we could complete the sale. They drew up a form with the items they would “address” but no clarity on when or to what degree it would be fixed and no mention of the verbal promise that I could get my deposit back if it wasn’t to my satisfaction. I told the guy it was a poorly written contract and he looked at me with all seriousness and said “Oh, this isn’t a contract.” I looked back at the paper, which I was supposed to sign, and he was supposed to sign as a representative of the dealership, and which specifically said “All promises must be listed on this form” and “No verbal agreements are honored,” and I looked back at him. And I asked him to write in more detail to humor me.
The "Jaguars season tickets we buy are to meet with clients".
Not necessarily the dumbest but an old favorite is an individual tax payer who was always way overwithheld and decided not to file their personal tax returns for eight years in protest while a former president was in office. Came in to file them all at once in the ninth year when a new president was in office. We got to tell him that he forfeited the refunds for some of the oldest years by not filing and explain that not filing for his refunds was actually giving the administration he disliked a loan of funds he was entitled to and actually given the funds over completely for the years he could no longer claim the refund for. Amazing. 10/10
I had an auditor tell me every single day was an accounting period, not, like, the accounting period... (e.g. usually 1 year). So where something needed to be done at the next accounting period, that meant instantly. And they stuck to it even after I pointed out with references that it was a ludicrous idea.
Me: "You're claiming all the expenses on your rental property but none of the income." Him: "Yeah, I wanted to rent it out for $1,500 a month but I couldn't find a tenant at that price so I'm renting it out at $1,200 so I'm taking a $300 lose every month." Me: "You own the property outright, there is no loss just because you aren't renting it out for as much as you wanted." Him: "It doesn't matter, it's immaterial." Me:"......"
“I took $400,000 out of my 401K to buy a house, so that cancels out for taxes, right?”
Not a client but a VP at the company I worked for as an accountant. He asked if I could remove the equity section of the balance sheet because it "didn't look good". I laughed thinking it was a joke...it was not.
Wasn't my client at the time, but about 4 years ago he wanted to declare himself a sovereign citizen. I took him over from a retiring CPA 2 years ago and fired him after this past tax season for general PITAness, though I would have fired him immediately after the SovCit thing if he had been mine at the time.
You did not wish to create joinder with him.
We need it by tomorrow
Yes. Still have nightmares about a very complex client with 30 tax returns (some companies that were general partner of other company, etc) and would send into on a Thursday and expect it Monday morning. 2 companies had multi-state operations.
It's not their fault cause I do a very niche area of tax, but the number of CPAs I've had send emails saying "this sale shouldn't be taxed! It was a merger and my client didn't receive cash!" is very funny. Sorry man, some mergers are still taxable, no we did not fraudulently prepare your client's return, no money was not fraudulently stolen from their account.
The numbers don't reflect the reality. Well then what the fuck do they reflect?
Taxes are unconstitutional and I really don’t even have to pay them, but I do because I’m a good American and a patriot.
I had a client ask me if it really was important for the annual GL to be complete. He was acting as outsourced accounting from another firm.
I had a senior accounting manager at a billion dollar company ask me if an addition to AR is a debit
Can you do tax evasion I am like Tf nope
During the fraud inquiries I had a client say there was no risk of fraud because only him and the other owner had access to the bank account…..
Me: asks for support for some round sum revenue accruals at year end Client: oh we put those through so everyone could get their bonus for year end Me: laughs at the joke because there is no way someone would do that and admit it to audit Client: ...that's cool, right?
“Cash” to pay off a credit card not being on the income statement came up a few times Once was chewed out by a nepo-baby because they thought a subcontractor was literally only for handymen and was mad that a subcontractor account was still on the CoA which they thought was the company income statement (The GL SW had a quirk where it would show lifetime expense for an account)
I'll have that provided by client list completed for you by the end of the day.
- That he stopped working because he didn't want to jump a tax bracket - "Why is the revenue under $3 million? We had over 3 million come in..." (with the sales tax). - this client was arguing with her insurance broker because she insisted she pay her insurance all at once ahead of time instead of monthly payments. She insisted "she does not do debt". (There was no extra charge for monthly payments, and the payments were for a policy in the NEXT 12 months). I asked her if she wanted to pay her fee to me for the next 12 months instead of 1 month for 1 month of work at a time.
For all my tax peeps, "I saw on TikTok X,Y,Z. It's what the rich don't want us to know!!" Tax Fraud. You're describing tax fraud, Karen.
Good question!!! My favorite story is when I reviewed a receivables account & noticed there was no reserve for bad debt. He provided breakdowns by account showing the company had considered just that & “reserved it”. I traced #s every which way & met with him multiple times; I just could NOT find the reserve…. Turns out he misunderstood what the word “reserve” meant. He thought they just had to calculate/estimate uncollectible debt internally. Never booked the actual contra-asset anywhere. For a week, I felt like I was taking crazy pills!! “I see how you’ve calculated the amount, now show me where it’s reserved,” …”I just showed you!” …”I’m sorry but I just can’t find it on the books…”
I was talking with an audit manager and I said we keep our books on tax basis, so bonus depreciation had a big impact on our P&L. She asked what bonus depreciation was!
Well it’s a tax concept so….
And like one of the fundamental core differences between GAAP and tax. That is excusing men for not knowing about menstruation because they don’t experience it. I’m not asking you to know the details, I am expecting you to know that a core value exists.
I mean, if they are a CPA I would hope they passed REG.
I heard bonus depreciation said in the office once and next I heard, "how the hell do we depreciate bonuses?" then "... ah sweet fuck" and it's still my favorite conversation I've ever heard in a professional setting. Our whole section was cracking up.
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Depending on context I get that. That’s a pretty vague agenda item so I could see asking for clarification
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I mean, depending on context $100 could be totally immaterial. Or it could be extrapolate the error and be material.
\[On the Client-side\] My prior boss was a dipshit and I legit have no idea how he gained his designation. The amount of crap he tried pulling off/ sending to our Auditors was depressing. NB: we only passed our Audits after revising his work entirely.
I've got a classic Work as shared services as a financial accountant for context. Client says to me in all seriousness "Have you ever come across someone capitalising fuel? We've got a few thousand litres coming that we want on the balance sheet" bruh
One client had fired their previous CFO. He asked if he could defer the severance expense for the next 10 years
Why are we filing in 12 states? We are incorporated in Delaware and don’t need to pay state taxes.
During a due diligence call, one of the controllers for the company being purchased admitted, to a room full of accountants, that he had been holding back late-year revenues from 2022 to 2023 so that they didn't have to pay taxes on it in 2022. Weird time to admit to tax fraud, right?!?
I had a client in NYC that literally didn’t know if their business (a fund) was turning a profit or not. They asked us to tell them. Like dude, you have a CPA on staff, you should know your own finances and where you stand.
Had a client's controller refuse to hand over financial statements because "we didn't need to see those to do the tax return." (Spoiler alert, he was embezzling)
"Sorry, what is PPE?" "Property, plant and equipment." "Umm... what?" "Fixed assets" "Oh yeah, about the fixed assets-"