Accounting Diagnostic™
Before You Fix the Books, You Need to Understand What’s Actually Wrong.
Many businesses contact us after someone tells them their books need to be “cleaned up.”
Sometimes it’s their CPA.
Sometimes it’s a lender.
Sometimes it’s a new bookkeeper.
Sometimes it’s the business owner looking at financial statements that simply don’t make sense.
The natural question is:
“How bad is it?”
Unfortunately, that question cannot be answered responsibly by looking at one report or quoting a cleanup price over the phone.
Accounting problems are rarely isolated to a single account.
A cash reconciliation issue may affect loan balances.
Payroll errors may affect financial statements.
Historical journal entries may impact retained earnings.
What appears to be a bookkeeping problem may actually involve several interconnected accounting issues.
That is why every Accounting Recovery engagement at Polaris Tax & Accounting begins with an Accounting Diagnostic™.
Rather than guessing, we evaluate the condition of your accounting system, identify the underlying issues, assess the level of risk, and develop a structured roadmap for moving forward.
Quick Answer
The Accounting Diagnostic™ is a structured professional assessment of your accounting records. Its purpose is to determine whether your financial statements can be relied upon, identify material accounting risks, evaluate the condition of your books, and recommend the most appropriate path forward. Depending on the findings, that recommendation may include Accounting Recovery, Controller Review, Financial Statement Review, CFO 2.0 Advisory, limited accounting corrections—or, in some cases, no corrective work at all.
Who Should Consider an Accounting Diagnostic™?
The Accounting Diagnostic™ is designed for business owners who have lost confidence in their financial reporting or need an independent assessment before making important financial decisions.
Common situations include:
- Your CPA says the books need significant corrections.
- Your financial statements don’t make sense.
- QuickBooks or Xero no longer reconciles properly.
- You inherited accounting records from another bookkeeper.
- You are purchasing or selling a business.
- You need reliable financial statements for a lender.
- Your Balance Sheet contains unexplained balances.
- Payroll liabilities no longer reconcile.
- Your accounting has fallen behind.
- You simply want to know whether your financial statements can be trusted.
What We Evaluate
Every engagement is tailored to the client’s circumstances, but the Accounting Diagnostic™ commonly evaluates the following areas:
| Area | Examples of What We Review |
|---|---|
| Cash | Bank reconciliations, unreconciled differences, historical changes. |
| Credit Cards | Outstanding balances, reconciliation status. |
| Accounts Receivable | Aging reports, unusual credits, duplicate activity. |
| Accounts Payable | Vendor balances, aging, historical adjustments. |
| Loans | Principal balances, lender agreement, interest posting. |
| Payroll | Payroll liabilities, payroll clearing, tax liabilities. |
| Balance Sheet | Unsupported balances, unusual accounts, negative balances. |
| Profit & Loss | Classification issues, unusual fluctuations, consistency. |
| Owner Equity | Distributions, capital accounts, retained earnings. |
| Historical Journal Entries | Adjustments, supporting documentation, recurring entries. |
| Accounting Procedures | Month-end close, reconciliations, internal controls. |
What the Accounting Diagnostic™ Is Not
Setting clear expectations is important.
The Accounting Diagnostic™ is an evaluation—not the corrective work itself.
It is not:
- Routine bookkeeping.
- Bookkeeping cleanup.
- An audit.
- A review engagement.
- A compilation.
- Tax preparation.
- An attestation service.
- A guarantee that accounting corrections will be required.
Its purpose is to evaluate the accounting system before recommendations are made.
What You’ll Receive
At the conclusion of the Accounting Diagnostic™, you will receive a structured assessment of your accounting records designed to help you understand both the condition of the books and the available options moving forward.
Depending on the engagement, your assessment may include:
Accounting Condition Assessment
An overall evaluation of the accounting records and financial reporting environment.
Risk Assessment
- Low Risk
- Moderate Risk
- High Risk
- Critical Risk
Major Findings
A summary of the most significant accounting issues identified during the review.
Business Risks
- Financial reporting risks.
- Cash reconciliation risks.
- Payroll risks.
- Lender reporting concerns.
- Tax reporting considerations.
- Operational risks.
Recovery Roadmap™
A prioritized action plan identifying what should be addressed first, what can wait, and which services—if any—are appropriate.
Why We Don’t Quote Accounting Recovery Before the Diagnostic
Clients occasionally ask us to estimate the cost of fixing their books before we’ve reviewed the accounting.
While we understand the desire for certainty, providing a meaningful estimate without evaluating the records would be irresponsible.
Consider a physician.
No physician would recommend surgery before performing an examination.
No structural engineer would estimate repairs before inspecting the foundation.
Accounting Recovery follows the same professional principle.
Before recommending a solution, we first determine the actual condition of the accounting records.
Only then can we recommend the most appropriate and cost-effective course of action.
Possible Recommendations
Every Accounting Diagnostic™ concludes with recommendations based on the facts—not assumptions.
Depending on the results, recommendations may include:
- No significant corrective work required.
- Limited accounting corrections.
- Accounting Recovery Services.
- Controller Review Services.
- Financial Statement Review Services.
- CFO 2.0 Advisory Services.
- Improved month-end accounting procedures.
- Internal control enhancements.
Not every business requires extensive recovery work.
Our objective is to recommend only the services appropriate for your situation.
Frequently Asked Questions
Will the Accounting Diagnostic™ fix my books?
No. The Accounting Diagnostic™ evaluates the accounting records and identifies recommended corrective actions. Any recovery or corrective work is performed under a separate engagement if needed.
Can you tell me the cost of Accounting Recovery during the diagnostic?
Yes. Once the accounting has been evaluated and the scope of work is understood, we can discuss appropriate service recommendations and pricing.
Do all businesses need Accounting Recovery?
No. Some businesses require only limited corrections or improved review procedures. Others may simply benefit from Controller Review or Financial Statement Review. The diagnostic helps determine the appropriate path.
Is the Accounting Diagnostic™ only for QuickBooks?
No. We perform diagnostics for businesses using QuickBooks, Xero, and other accounting systems. The focus is the quality of the accounting records—not the software platform.
Can you work with my existing bookkeeper or CPA?
Yes. Many engagements involve collaborating with a client’s existing accounting team. Our goal is to improve the reliability of the financial reporting, not replace professionals who are already serving the business.
Every Successful Recovery Begins With Understanding the Problem
Reliable financial reporting doesn’t begin with random journal entries or bookkeeping cleanup.
It begins with understanding the accounting system, identifying the underlying issues, and developing a structured plan.
That’s the purpose of the Accounting Diagnostic™.
If you’re ready to understand the true condition of your books and receive a professional roadmap for moving forward, we’re ready to help.