If your accountant has a conflict of interest, it could cost your company a lot of money. When you hire someone, either bringing in a firm to work alongside your business or hiring a professional directly, you expect them to work with your best interests in mind. When this doesn’t happen, it undermines your trust and can be a very expensive reality.
There are numerous examples of how an accountant could have a conflict of interest, and every case is unique. With that said, these are a few things to keep in mind if you’re concerned that your company’s accountant may have a conflict of interest.
Representing two clients
A conflict of interest could occur if the accountant represents two different clients who have opposite interests. Maybe you are involved in a dispute with a vendor over payments, and you want the accountant to come in and clear things up so that the business can move forward with the books in order. But if it turns out that the accountant is also representing that vendor, they may not truly have your best interests in mind.
Providing financial advice
Another example could unfold if an accountant is providing advice to business owners like yourself who are attempting to purchase another business. Maybe you and a local competitor are both trying to make the purchase, and the accountant is helping both of you. Does that call any of their decisions on your behalf into question? Is the advice that they give you actually going to help you – or will it serve their other client, who is also paying them?
Direct family members
In some cases, a conflict of interest could even involve a family member of the accountant. Say that you are trying to purchase a competitor’s business to merge with your own. The accountant is working with you to hammer out the details of that purchase. You then discover that the accountant’s father-in-law is the owner of the business, or an investor in that business and then you understandably question who the accountant is really working for.
By no means are these the only ways that a conflict of interest can manifest, but these examples can help to give you an idea of how to spot one. If you find yourself in this position, you need to know exactly what legal options you have available to you. Seeking legal guidance is generally the best way to start.