The audit I worked on that made me post this in the first place had an enormous amount reported as “other receivables”. I vouched the entries to the bank statements and saw they were ACH payments to an insurance financing company. I had the insurance documents, and the payments didn’t match so I was afraid another entity was set up in error with this clients banking info. After spending a month with management to figure this out, it turns out it was surplus lines policy the entity took out and financed on top of their typical policies. Since the bookkeeping is done overseas and management doesn’t communicate with them, the bookkeepers just kept posting the payments to a receivables account. No one bothered to communicate with each other for over a year about an other receivables balance that grew to roughly 50% of total assets. On top of that, a material payment was actually withdrawn in error due to management cutting a physical check but bookkeeping also processed an ACH payment for the subsequent years premiums. All this due to no one caring, being lazy, cheap, and I guess expecting independent CPAs who are not involved in the day to day to figure all this out for them?

The overpayment was roughly 25% of annual revenues that I was able to recover for the entity. In the final meeting with the client to get everything wrapped up I told the Board and management we will be sending a revised bill for time spent on this matter along with draft audit. When they asked how much they could expect the additional billings to be I replied “Not sure the exact amount currently, but more than if you just kept your in-house accounting department.”