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Accounting Problem and Possible Solutions

Student’s Name

Institutional Affiliation

Course

Lecturer

Due Date
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This paper discusses the problem related to G & R Bookkeeping Services in preparing

financial reports of its clients. It will also identify the possible solutions to eradicate the

identified problem.

G & R Bookkeeping Services is faced with the challenge of providing financial

statements for their clients. The information needed for making these statements is not always

easy to obtain or obtainable at all. There are two main reasons for this: the conflict of interest,

and the other is the lack of volume of the transactions.

Accounting firms are under strict auditing standards which require them to be

independent of their clients (Xiao et al., 2000). Therefore, the firms do not want to have their

reports to be influenced by their clients. This can be a challenge with the lack of volume of

transactions. Financial statements are only produced when there are large enough transactions.

With small transactions, the information is not complete enough and is not reliable.

Additionally, transactions do not always have to be reported, so they may not be

available. This leaves G & R Bookkeeping Services in a position where they are forced to

depend on their own information for the client's business. This creates a huge problem because if

the information does happen to be correct, the firms will not be able to give the correct

information to the client or the government.

G & R Bookkeeping Services also fails to provide the information in a timely manner.

Due to the lack of volume of transactions, they are forced to wait for months or even years until

they have enough transactions to produce the reports. By the time they make the reports, they are

already out of date hence unreliable. This makes it difficult for the client to know how their

financial reports are doing and how to react to any changes in their information. Suppose the
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client feels that they are not receiving the correct information on the status of their business. In

that case, they end up concluding that the G & R Bookkeeping Services are incompetent and

might take their business elsewhere. Many clients have ended up choosing other firms.

Most firms consider the solution to this problem to be the standard accounting software or

computer program (Spilnyk et al., 2020). This program is basically a database that stores

financial data. The program keeps track of all the numbers, making sure that they are all entered

into the program on the correct date. This program also stores all the information in the correct

format. It has the ability to do all of this automatically. The program also has an option to check

the information against previous financial statements, helping to keep the financial information

up to date and consistent. As soon as a firm has an account with a database, they can use the

program to submit financial information in a format that is standardized for each potential client.

The second solution is for the firm to obtain all the required information from the client to make

the financial reports in time. The client will have to provide the information that will be needed,

and then the firm can use the information and do the rest. The firm will have to be certain that

the information is correct. There are a few ways to ensure that the information is correct. First,

the firm will have to get the information from a third party, such as the Internal Revenue Service

(IRS) and then have the client verify the information.

In conclusion, any firm that is looking to save on time can use the database program to create

standardized financial reports that can be sent to their clients along with the information needed

to ensure accuracy.
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References

Xiao, J. Z., Zhang, Y., & Xie, Z. (2000). The making of independent auditing standards in

China. Accounting Horizons, 14(1), 69-89.

Spilnyk, I., Brukhanskyi, R., & Yaroshchuk, O. (2020, September). Accounting and Financial

Reporting System in the Digital Economy. In 2020 10th International Conference on

Advanced Computer Information Technologies (ACIT) (pp. 581-584). IEEE.