Sample Accounting Diagnostic™ Report
See What a Professional Accounting Assessment Looks Like
One of the most common questions prospective clients ask is:
“What exactly will I receive after an Accounting Diagnostic™?”
It’s a fair question.
An Accounting Diagnostic™ is more than a conversation or a quick review of your financial statements. It is a structured evaluation of your accounting environment designed to identify material risks, assess the reliability of your financial reporting, and develop a practical roadmap for improvement.
The example below illustrates the type of information that may be included in an Accounting Diagnostic™ Report. Every engagement is customized to the client’s business, accounting system, and objectives, so no two reports are identical.
Example Client Profile
| Business Type | Professional Services Company |
|---|---|
| Accounting Software | QuickBooks Online |
| Annual Revenue | $2.4 Million |
| Employees | 18 |
| Review Period | Previous 24 Months |
This example is fictional and provided solely to illustrate the format and scope of an Accounting Diagnostic™.
Executive Summary
The accounting system provides management with useful operational information; however, several areas require attention before the financial statements should be relied upon for lender reporting or strategic decision-making.
Significant issues were identified involving cash reconciliations, loan accounting, historical journal entries, and payroll liabilities.
Although these issues are correctable, they should be addressed in a structured sequence to avoid creating additional accounting inconsistencies.
Accounting Health Score™
| Category | Score | Assessment |
|---|---|---|
| Cash & Bank Reconciliations | 82 | Strong |
| Accounts Receivable | 88 | Strong |
| Accounts Payable | 84 | Strong |
| Loan Accounting | 56 | Needs Improvement |
| Payroll Accounting | 61 | Needs Improvement |
| Balance Sheet Integrity | 67 | Needs Improvement |
| Financial Reporting | 73 | Acceptable |
| Internal Controls | 78 | Strong |
| Overall Accounting Health Score™ | 74 / 100 | Moderate Risk |
Key Findings
- Two loan accounts do not reconcile to lender statements.
- Payroll tax liability accounts contain unsupported historical balances.
- Several year-end journal entries lack adequate supporting documentation.
- One bank account contains unreconciled differences dating back more than eight months.
- Opening Balance Equity contains a residual balance that should be investigated.
- Month-end closing procedures are inconsistent.
Risk Assessment
| Area | Risk Level |
|---|---|
| Financial Reporting | Moderate |
| Cash Management | Low |
| Tax Reporting | Low to Moderate |
| Payroll Accounting | Moderate |
| Lender Readiness | Moderate |
| Operational Decision Making | Moderate |
Recovery Roadmap™
| Priority | Recommended Action |
|---|---|
| Priority 1 | Complete all outstanding bank reconciliations and resolve unreconciled differences. |
| Priority 2 | Reconcile all loan balances to lender statements and correct principal allocations. |
| Priority 3 | Analyze payroll liability accounts and remove unsupported historical balances where appropriate. |
| Priority 4 | Review historical journal entries and obtain supporting documentation. |
| Priority 5 | Implement standardized month-end closing procedures and quarterly Controller Reviews. |
Recommended Services
| Service | Recommendation |
|---|---|
| Accounting Recovery™ | Recommended |
| Controller Review Services | Recommended following recovery. |
| Financial Statement Review Services | Recommended annually. |
| CFO 2.0 Advisory | Not currently necessary. |
Expected Benefits
- Improved confidence in financial reporting.
- Reduced year-end CPA adjustments.
- Reliable Balance Sheet accounts.
- Improved lender readiness.
- Stronger month-end accounting procedures.
- Better management reporting for business decisions.
Important Note
This example is intended to demonstrate the structure and methodology of an Accounting Diagnostic™ Report. The scope, findings, recommendations, and supporting analysis provided in an actual engagement will vary based on the complexity of the business, the condition of the accounting records, and the objectives of the client.
An Accounting Diagnostic™ is an advisory evaluation designed to improve the reliability of accounting information. It is not an audit, review, compilation, or other attestation engagement.
Ready to Understand the True Condition of Your Accounting?
Every successful Accounting Recovery engagement begins with understanding the accounting—not guessing.
Our Accounting Diagnostic™ provides business owners with a structured assessment of their accounting system, an Accounting Health Score™, and a Recovery Roadmap™ that prioritizes the actions needed to restore reliable financial reporting.