Accounting Diagnostic™
Know the Condition of Your Accounting Before You Spend Money Fixing It
One of the biggest mistakes business owners make is paying someone to “clean up the books” before anyone has determined what is actually wrong.
Sometimes the problem is minor.
Sometimes years of accounting errors have accumulated beneath the surface.
Sometimes the bookkeeping isn’t the problem at all.
At Polaris Tax & Accounting, every Accounting Recovery engagement begins with an Accounting Diagnostic™—a structured evaluation designed to determine whether your accounting records can be trusted, identify significant accounting risks, and develop a practical roadmap before reconstruction begins.
Rather than guessing where the problems are, we identify them.
Quick Answer
An Accounting Diagnostic™ is a professional review of your accounting system designed to evaluate the reliability of your financial records before corrective work begins. It identifies accounting errors, reconciliation issues, reporting deficiencies, financial statement risks, and operational weaknesses so business owners understand the true condition of their accounting before investing in reconstruction or ongoing accounting services.
Why Start With a Diagnostic Instead of Jumping Into Cleanup?
Imagine hiring a contractor to renovate a building without first inspecting the foundation.
The cosmetic work may look impressive, but if the underlying structure is compromised, the problems will eventually return.
Accounting works the same way.
Many businesses immediately request bookkeeping cleanup because their CPA identified issues, their lender rejected financial statements, or they simply no longer trust the numbers.
However, correcting transactions without first understanding why the accounting system failed often results in unnecessary work, higher costs, and financial records that remain unreliable.
An Accounting Diagnostic™ helps identify the underlying causes before reconstruction begins.
What Does an Accounting Diagnostic™ Evaluate?
| Area | Objective |
|---|---|
| Bank Reconciliations | Determine whether reported cash balances are reliable. |
| Balance Sheet | Identify unsupported balances, unexplained accounts, and financial reporting risks. |
| Income Statement | Evaluate classifications, unusual fluctuations, and reporting consistency. |
| General Ledger | Review posting accuracy, duplicate transactions, and unusual journal entries. |
| Payroll | Evaluate payroll liabilities and accounting treatment. |
| Sales Tax | Identify reporting inconsistencies and liability issues. |
| Loan Accounts | Review balances, principal reductions, and account classifications. |
| Owner Equity | Evaluate distributions, contributions, and retained earnings activity. |
| Financial Statements | Assess whether management can reasonably rely upon current reporting. |
What You Receive
- Executive Summary of Findings
- Accounting Risk Assessment
- Financial Statement Reliability Review
- Reconciliation Status Report
- List of Material Accounting Issues
- Estimated Scope of Recovery Work
- Prioritized Recovery Roadmap
- Recommendations for Future Internal Controls
Instead of simply hearing “your books need work,” you’ll understand exactly what is wrong, why it matters, and what should happen next.
When Should You Schedule an Accounting Diagnostic™?
Businesses commonly benefit from an Accounting Diagnostic™ when:
- Your CPA says significant corrections are needed before preparing your tax return.
- Your financial statements don’t make sense.
- Your bank accounts haven’t been reconciled.
- You recently changed bookkeepers.
- You are applying for financing.
- You are preparing to sell your business.
- You inherited someone else’s accounting records.
- Your accounting software was recently converted.
- You no longer trust your financial reports.
Who Is This Service Designed For?
Our Accounting Diagnostic™ is designed for businesses that already have accounting records but are uncertain whether those records accurately reflect the financial condition of the business.
It is particularly valuable for companies with annual revenue between approximately $500,000 and $10 million, although businesses of all sizes can benefit from a structured accounting assessment when significant issues are suspected.
What Happens After the Diagnostic?
Every Accounting Diagnostic™ concludes with a recommended path forward.
Depending on our findings, that recommendation may include:
- Accounting Recovery Services
- Controller Review Services
- Financial Statement Review Services
- QuickBooks Recovery Services
- Xero Recovery Services
- CFO 2.0 Advisory Services
Not every business requires a complete Accounting Recovery engagement.
Some need only limited corrections.
Others require ongoing financial oversight.
The purpose of the diagnostic is to determine the most appropriate solution—not to sell unnecessary work.
Frequently Asked Questions
How long does an Accounting Diagnostic™ take?
The timeframe depends on the size and complexity of the business, the condition of the accounting records, and the availability of supporting documentation.
Will you fix my books during the diagnostic?
No. The Accounting Diagnostic™ is an evaluation and planning engagement. If corrective work is recommended, it is performed under a separate engagement after the findings have been reviewed with you.
Can the diagnostic identify tax-related issues?
The review may identify accounting issues that could affect tax reporting. Whether amended returns or additional tax work is necessary depends on the specific facts and should be evaluated separately.
Can this be performed remotely?
Yes. Most Accounting Diagnostic™ engagements can be completed securely using electronic accounting records and supporting documentation.
Do you work with QuickBooks and Xero?
Yes. We perform Accounting Diagnostics™ for businesses using QuickBooks Online, QuickBooks Desktop, Xero, and other commercial accounting platforms.
Schedule Your Accounting Diagnostic™
If you’re questioning whether your financial statements can be trusted, don’t start with assumptions.
Start with facts.
Our Accounting Diagnostic™ is designed to evaluate the condition of your accounting system, identify material risks, and provide a clear roadmap so you can make informed decisions about your business and your financial reporting.