I was a former CPA /Auditor and corporate accountant.

31 Comments

1. AnonymousMarch 15,2026 at 10:14AM UTC

   What expenses are they passing through the company that are personal? If it makes you uncomfortable do some research and find what is acceptable expenses. You would not want to lose your license over this.

2. AnonymousMarch 16,2026 at 1:51PM UTC

   I worked at a major entertainment company years ago in the finance and administration department. My boss, who was the VP of the department, did this often(I also think it was encouraged by the company culture). This included dinners out with people who were somewhat business related, gifts for employees, things of that nature. I'm also talking about over 30 years ago, when such practices may have been not examined as closely. I didn't like seeing that, but I didn't say anything (I was the secretary who checked over my bosses and other people's expense report reports. He tended to be very strict with other people, interestingly.)

3. AnonymousMarch 16,2026 at 4:17PM UTC

   I have communicated that. These expenses should not be absorbed into the company.

4. AnonymousMarch 15,2026 at 8:28PM UTC

   If they are actually committing tax evasion and you knowingly help them, you may be considered guilty as well. This would be a matter to ask a lawyer. Some personal expenses related to business travel are probably things they can legally count; if they are doing business out of town, they reasonably need a hotel room and meals, but remodeling their home kitchen, probably not. If in doubt, go with obeying the law. Tell them privately that you want to help them receive every deduction they are entitled to, while you cannot falsely claim they are entitled to something they are not. I would do it in writing via email, then print a copy and/or forward it to a personal account to verify that you did this just in case it ever becomes an issue.

5. AnonymousMarch 16,2026 at 12:25PM UTC

   As a retired IRS auditor, this is pervasive with small businesses. The question is how you are accounting for it. “Personal draw” would be correct accounting and then it’s not being deducted on taxes.

6. AnonymousMarch 16,2026 at 4:15PM UTC

   Correct, I did advise that this should be recorded as a draw or at least a loan to be paid back to the business. I feel uncomfortable knowing they don't want to fix it. This is my concern after getting back into accounting, is this all I have to look forward to?

   My last job was as Accounting Manager and Financial Reporting Manager for for a large publicly traded automotive manufacturer which was audited. The level of what was material was relatively high. If I didn't agree with how something was recorded it was ultimately, the CPA firm auditor and Finance head who had to agree if it was material. Now I record the entries and prepare the books for the tax firm.

7. AnonymousMarch 16,2026 at 1:46PM UTC

   Just call it an owner draw? Former small business owner who occasionally screwed up and paid with the wrong credit card. That's how my accountant and I made sure it wasn't deducted as a business expense.

8. AnonymousMarch 16,2026 at 4:07PM UTC

   I did communicate that it should be recorded as a draw or as a loan to be paid back,

9. GirlBossanova934974March 16,2026 at 3:06PM UTC

   As an accountant myself, I think you have to be able to separate the 2 areas of accounting that are at issue here. The two areas are financial accounting and tax accounting. You are responsible for the financial accounting. You are there to close the books for 2025 and pass on the financial statements to the tax accounting firm. You are not preparing the tax return. The representations made in the tax return are the responsibility of the owners and tax accounting firm. The tax accounting firm should be doing checks on the business expenses to make sure they are ACTUAL expenses of the BUSINESS. In my experience, I always looked at big dollar items, which drew my attention. The IRS does same.

10. LisaMarch 17,2026 at 12:30PM UTC

    That is not correct. The tax accountant prepares the return on the financials they have been given. It is not their responsibility to 'audit' the books also. If you KNOW they are committing fraud, which they are, it is your responsibility to bring it up to the owners and to the tax accountant. You obviously do not feel comfortable with this situation. What does that tell you? You know it's wrong. I am a corporate controller for many small businesses and I would NEVER allow this. The only thing I would ever slip through is meals expenses. If they tell me a meal is with a client and they discussed business, fine. If they are lying to me, that is their problem. Other than that there really isn't anything that I would let get into the books that 'might' not really be a 'business' expense. If it's personal and paid with a company account, it's an owner distribution and belongs on the equity section of the balance sheet. It is not a P&L item.

11. AnonymousMarch 17,2026 at 6:15PM UTC

    I have done both by communicating with the owners and tax accountants. It is out of my hands. I will be resigning but will offer to help them find and train a replacement.

12. Dawn MarieMarch 20,2026 at 4:24PM UTC

    Nope. Accountants have an ethical and fiduciary responsibility. This is not something that’s just passed onto a tax accountant. Once the awareness is there and it’s brought to attention it needs to be addressed. If they’re not willing to acknowledge and adhere to GAAP ethics it’s not worth the risk of staying or associating.

13. AnonymousMarch 16,2026 at 3:23PM UTC

    Good for you for having ethics! If it were me I would immediately stop working for this company and wish them the best. If you are in contact with their tax person in the transition from doing their books and also sending information their way add in some notes to alert the items that might cause concern. Unless you want to be a whistleblower and report their wrongs to the IRS confidentially then just step away. Unless the expense is directly associated with the business it should not be paid by the business. Clearly it is fraud and they should not get away with it. This is where you must decide the next step with them.

    There are ethical companies out there that do not do this that would love to have your expertise. Should you decide to consider other places if asked let them know that you do things completely by the books and follow the rule of law in accounting. Don't let on that another employer did shady things, you don't need to air that dirty laundry with others. You know going forward who will deserve you and just need a list of questions to find out how honest they are before you engage next time.

14. AnonymousMarch 17,2026 at 2:14PM UTC

    Offering some benefit of the doubt here.

    is it possible that they thought this was ok and didn’t understand the practice is at best unethical? Could you and the tax preparer sit down and explain it to them - in a non-accusatory way?

    if you do that and they still want to proceed in that manner, you have your answer and maintaining your ethics is the best way to go.

    sometimes, people just don’t know what they don’t know and hearing other people say “I do this”, could have influenced them.

15. AnonymousMarch 17,2026 at 6:06PM UTC

    They know and have chosen to ignore it,

16. Jacqueline CutlerMarch 17,2026 at 2:46PM UTC

    Quit now, and do so gracefully. You proved to yourself that you can return and that your skills, and clearly, your ethics, are still there. Run with that. You will find other small businesses that need your help and are running legally.

17. Kerry RoperMarch 24,2026 at 3:02PM UTC

    This is a really foolish comment made from a person who isn’t familiar with practices of MANY a small business. The comment about letting the record show your questions, and then allowing their tax accountant do the rest of the sorting out and guidance, Thats the comment that the OP should take to heart.

18. Leah StranathanMarch 17,2026 at 3:21PM UTC

    Unfortunately, this is incredibly common in small businesses. However, on the tax side, the preparer will classify these as owner distributions/owner draws.

19. AnonymousMarch 18,2026 at 4:56AM UTC

    Not when they've intentionally buried those costs unfortunately. I've informed the tax firm and now have done all I can.

20. AnonymousMarch 17,2026 at 3:33PM UTC

    You did your job by inquiring about the expenses. It is the job of their tax accountant to guide them as to best practices. The IRS does the rest. I guarantee they scrutinize this sort of thing. I think you are over reacting and over stepping. You don’t know what the overall outcome of the tax return will be. There are many creative options in lessening overall taxes which are not considered tax evasion. Now if you are seeing real egregious issues that you are obligated to not only report but refuse to involve yourself then that’s a different story.

21. AnonymousMarch 17,2026 at 6:10PM UTC

    I informed them and then the costs were buried in hidden accounts, not by me. I did inform the accounting firm when I first came across this and updated them. I agree it is not my decision but is clearly wrong and I cannot work in that environment.

22. AnonymousMarch 17,2026 at 7:49PM UTC

    A CPA has a duty to operate with due professional care. It is not overreacting.

23. AnonymousMarch 18,2026 at 12:26PM UTC

    As a person in similar shoes once, I do agree she has done her job in questioning but disagree that she “overstepped”. You can’t imagine how many BS expenses were covered and approved and yet one is denied an ergonomic mousepad as it was considered “frivolous”. I ultimately left the position because I could not stand processing these expenses with a blind eye. I was tasked for calling them out but ultimately told to pay them. It went against every fiber in me that I had no oversight in the actual frivolous spend

24. maria roseMarch 19,2026 at 8:51PM UTC

    The OP is reacting normally to question the listing of personal expenses on the log account but the question of why they reacted is verify that they will not be held liable for listing those expenses—especially in a small business setting. As I understand it the OP is recording all the receipts given for all expenses in designated columns and then they pass all the receipts and log on to the accountant for the business whose job like is to make sure that the expense receipts match the given column notation and hopefully would classify those personal expenses in the correct column which may not be included as an expense for the business. This is probably being done because of the way the business mixes personal and business funds into one general fund to keep all funds /income classified as investment funds versus earnings income. But in no way is the OP liable for misrepresenting the expenses based on doing their job of listing all the receipts

25. Dawn MarieMarch 20,2026 at 4:21PM UTC

    Not overstepping. An accountant has a fiduciary responsibility. It is wrong.

26. AnonymousMarch 17,2026 at 3:59PM UTC

    CYA - document what u observed in an email to them for proof for GAACP purposes.

27. JoyceGMarch 17,2026 at 4:39PM UTC

    Do a lot of small businesses do this? Yes. Is it right? No. There are a lot of accounting jobs available. Don't sacrifice your integrity thinking that this is the only position possible.

28. AnonymousApril 7,2026 at 2:33PM UTC

    Yes, but depending on OPs credentials the consequences could directly affect her. Theres a difference in professional accountability between a bookkeeper and someone who holds a CPA license. If its the latter she risks losing that if she doesn't handle the situation accordingly.

29. wynnrenMarch 17,2026 at 6:56PM UTC

    It is not common practice. Code the transactions to either “personal expenses” or capital distributions and leave it at that. The tax preparer can use that information to properly exclude the transactions from the return.

30. AnonymousMarch 18,2026 at 6:18PM UTC

    You are fine as long as you code them correctly, and you are not signing off on anything that would affect your fiduciary responsibility.

31. Dawn MarieMarch 20,2026 at 4:20PM UTC

    Nope