When accounting records span 70+ entities, small inconsistencies can turn into major reporting risks.
In this case study, Michael Mastruzzo, Partner, Real Estate Advisory at SAX, shares how our team reconstructed several complex trial balances, reconciled key accounts to source documents, and restored confidence in the company’s financial reporting.
Read the case study to learn how SAX approaches complexity with confidence.
Challenge
A plumbing company with over 70 entities across 41 partnerships did not maintain regular accounting records or supporting schedules for key accounts, including mortgages, fixed assets, and other liabilities. Because the company was closing its own books, several balances did not reflect the normal course of transactions (e.g., mortgage payable and other liability accounts showing debit balances). These discrepancies required correction before accurate tax returns and internal financial statements could be prepared.
Action
The company engaged SAX to clean up its books and records and to develop reporting schedules supporting significant account balances.
Resolution
SAX assembled a team of tax and accounting advisory professionals to reconstruct key components of the company’s trial balance. The team gathered tax returns, bank statements, mortgage statements, and other financial records to post appropriate journal entries and reconcile balances accurately. In addition, SAX prepared fixed asset depreciation schedules and mortgage amortization schedules to ensure proper accounting treatment in future periods.
Results
SAX’s structured and methodical approach enabled the company to reconcile its financial activity and restore accuracy to its books and records. As a result, the organization was positioned for reliable tax reporting and cleaner financial reporting in future periods. For accounting clean-up engagements, SAX works collaboratively with internal team members and company management to ensure reporting is complete, accurate, and built for long-term sustainability.
“Sax” is the brand name under which Sax LLP and Sax Advisory Group LLC and its subsidiary entities provide professional services. Sax LLP and Sax Advisory Group LLC (and its subsidiary entities) practice as an alternative practice structure in accordance with the AICPA Code of Professional Conduct and applicable law, regulations and professional standards. Sax LLP is a licensed independent CPA firm that provides attest services to its clients, and Sax Advisory Group LLC and its subsidiary entities provide tax and business consulting services to their clients. Sax Advisory Group LLC and its subsidiary entities are not licensed CPA firms.