Identifying problems in a financial statements and figuring out how to minimize it in the first place, is a vital role the accounting people should strive in. Occurrence of problems are inevitable although, by virtue, it is presumably that financial reporting process always works the way it should and that the resulting financial statements are accurate.
Not only small medium businesses, the same issues also happened in giant-fortune 100 companies, otherwise big scandal such as Enron, WorldCom, Xerox, Quest, Tyco, and many more, never existed.
Possible reason for those problems could endless—ranging from unintentional errors to intentional deception or fraud—resulting financial statements sometimes contain errors or omissions that can mislead investors, creditors, and other users. There are, however, some basic paths or patterns about where and what the problems commonly occurred that accounting people can identify and prevent from happening. Through this post I am going to discuss about types of problems in financial statements and how to prevent them from occurring. Financial statement problems, in general, are classified into three categories—from which then a controller is able to develop more preventive procedures, policies, systems and tools that the entire company should follow and use
