Accounting Articles > Record Keeping / Bookkeeping:

Should I try to do my own income statement and balance sheet?

Unless you are a degreed Accountant at the very least, the answer is no. Just the fact that you can write a check and make a deposit in a general ledger program doesn't mean that you can keep your own books. As a matter of fact, it generally just makes you dangerous.

Let's set up some scenarios.

1. Betting your future on your own accounting skills. You put what you think is correct into a general ledger program. You honestly think that it is correct. But how do you know? You don't. You find some accountant to do your income tax return and, after you sign a waiver of responsibility, he creates the income tax return without doing much or any due diligence. Then he signs your return.
   
   If that return gets audited, are you confident that you won't have a problem? You probably will. Whose responsibility will it be? Just the fact that the accountant signed your return doesn't make him responsible. You signed a waiver that protects his license. You’re on the hook. Are you willing to bet your future on your own accounting skills? Do you know enough about taxation to survive an audit? No.
2. Waiver of responsibility. The only difference is that you do not sign a waiver of responsibility. Whose responsibility is it for the bad accounting? You handed the accountant an Income Statement and Balance Sheet and told him that it was correct. Based upon that assurance, he created the Income Tax Return. Under the Rules of Compilation, you're on the hook. The ultimate responsibility is yours.
3. Basic human tendency. Why would you ever try to police yourself? If you don't even know the rules in the first place, why would you bet your future and your freedom on your abilities? Even if you do know the rules, are you going to tell me that you won't try to bend them?

Don't even try to perform brain surgery on yourself. Send your books out to qualified, experienced accountants, to professionals with the proper letters behind their names. The main job of an accountant is to protect you and your family. In this area you will always need help and protection.