If you’re going to take a job at a company with finances you know are iffy, it pays to conduct some due diligence and flesh out the exact parameters of your authority before you sign on. A federal trial court has ruled that an auto body shop’s inside CPA/controller was personally responsible for 100% of its unpaid. It was enough, the court said, that the CPA had some authority over the company’s finances; exclusive authority wasn’t necessary. (U.S. v. Cooke et al., No. 1:08-cv-01415, D.C. S. Ind., 2011)
Third time’s not a charm
The auto body shop’s founder’s first company went bankrupt. His second company racked up huge debts, and his third company was the successor to the second.
A CPA took a job as the third company’s inside CPA/controller on the recommendation of the bankruptcy attorney. With sole authority over the company’s finances, he was given a 10% ownership interest. He maintained the company’s books ...(register to read more)