Business Accounting

3 Tips for Choosing the Right CPA For Your Car Dealership

2019-05-20 | by Gene B. Reynolds, CPA

Our CPA firm has been privileged to work with car dealerships that provide excellent service and value to their customers. Unfortunately, many great car dealerships are financially impacted by internal theft.

According to a recent report by the Association of Certified Fraud Examiners (ACFE), the average time to identify theft or fraud is 18 months after the initial event. Also, approximately 58 percent of these cases do not lead to recovery for the dealership.

Car dealerships that need to prevent theft from impacting their financial position should consider working with a CPA firm to help reduce the identification time and increase the likelihood of recovery.

How to Choose the Right CPA Firm for Car Dealers

To narrow the scope of choosing the best CPA firm, you should test each firm’s knowledge of automotive accounting issues to evaluate their knowledge, expertise, and advice, especially as it relates to theft.

Tip #1: Check the Track Record of the CPA Firm

Information is readily accessible to evaluate whether a CPA firm has history working with clients in your industry. If you encounter a CPA firm that does not seem to have any experience working with car dealerships, you likely do not want to be the guinea pig for the firm to jump into a new industry.

Reach out to the CPA firms that you are considering to have a conversation about their practice and your business. Gauge their expertise and their ability to understand the accounting challenges specific to your industry, including fraud or theft:

• Does the CPA firm have relevant history of being able to identify fraud in the books?
• Can they proactively spot theft before it turns into a significant loss for a car dealership?

Tip #2: Present a Hypothetical Scenario to Each CPA Firm

As you narrow your options, consider walking through an accounting scenario that your dealership experiences on a regular basis. This exchange will help you gauge whether the CPA firm is capable of understanding the issue, analyzing the situation, accurately recording the activity, and strategizing a solution for future recording.

• Walk through a scenario where you suspect fraud or theft from one department in your car dealership.
• Can the CPA firm present a strategy to examine the books to identify the potential source of fraud or theft and reconcile the accounts?

Tip #3: Have Multiple CPA Firms Perform a Mock Audit

Once you narrow down the CPA firms to a few candidates, consider having each firm perform a mock audit of your past financials.

This step will allow you to see how well they know accounting for automotive companies in a simulated setting. Identify whether the firm can spot the theft and present a recommendation to protect your dealership from the financial effects of theft.

• Verify whether the CPA firm can identify fraud or theft in your books.
• Is the CPA firm capable of analyzing your financial records to present the best approach to protect your dealership from theft?

By identifying high-risk departments for fraud or theft, you could reallocate resources to reduce your exposure to financial risk.

Reynolds and Associates Equipped to Support Car Dealership Accounting Needs

Reynolds and Associates works with car dealerships to support their accounting needs and implement an industry-specific approach to accounting, recordkeeping, and financial reporting.

We would appreciate the opportunity to discuss the specific needs of your car dealership and how we can provide support for the accounting issues that concern you, especially theft or fraud.

Schedule a free consultation today. Contact us by completing the form on our website, email info@reynoldscpafirm.com, or call 713-316-4560.

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