Questions to ask before signing off on your annual financial statements

Before your accountant hands over your annual financial statements, there's a temptation to sign them and move on. That's where things go wrong. A set of properly compiled statements is your financial truth — the document SARS, banks, and investors read about your business. Signing off without understanding what you're signing is a risk you can avoid by asking five clear questions, listening hard to the answers, and knowing what evasion sounds like.

"Walk me through the key numbers and what changed from last year"

A good accountant doesn't just hand you a PDF and hope you read it. They explain the narrative: why revenue moved, where costs shifted, what the bottom line really says. Listen for concrete answers tied to your business. "Your trade receivables went up by 40 per cent because you extended terms to your top two clients" is clear. "Numbers just do that sometimes" is not.

If the accountant seems defensive or vague about explaining variances, that's a flag. They may not have examined the underlying data closely enough, or they may be aware of issues they're reluctant to surface. Either way, you need someone who walks the statements through with you before you sign. Ask them to point to the three biggest movements and explain each one. If they can't, or if their explanation doesn't match what you know happened in the business, push back.

"Are there any adjustments or estimates in these statements?"

Financial statements aren't always crystal clear because business doesn't work that way. Your accountant will have made judgement calls: depreciation on assets, provisions for bad debts, accruals for work done but not yet invoiced, inventory valuations. These are legitimate and necessary, but they're estimates. You need to know where they've been used and why.

Ask specifically: what accounting policies have been applied, and have any changed from the prior year? A competent answer sounds like: "We've depreciated the vehicle fleet over five years, same as last year. We've also set aside a provision of R45 000 for the three invoices over 90 days old, which is in line with the pattern we've seen." A weak answer deflects or generalises. If the accountant hasn't documented their reasoning, that's a worry.

"What would happen if SARS questions these numbers?"

This isn't an accusation — it's a due-diligence question. Your accountant should be confident enough to explain which areas might draw attention and why the statements hold up. If there are areas that feel borderline (a very high expense ratio, unusual related-party transactions, or a sudden jump in deductions), the accountant should tell you what evidence supports those numbers and what documentation you should have on hand.

If the accountant avoids this question or seems uncomfortable, you're not getting the full picture. You need someone who has thought through the audit risk and can articulate it calmly.

"Have you raised any concerns with me before now?"

A conversation about the financial statements should never be a surprise. Good accountants flag issues as they work — missing invoices, inconsistent records, unexplained transactions — and give you a chance to resolve them before the statements are finalised. If this is the first time you're hearing about problems, that's poor practice.

Ask whether there were any areas where your records were incomplete or unclear, and how they were resolved. The answer tells you whether your accountant was thorough and whether you got the chance to steer your own numbers.

"What do you need from me going forward?"

Before you sign off, lock down what's expected next year. Better records? Monthly check-ins? A documented approach to certain transactions? A good accountant will be specific about what makes their job easier and your statements cleaner. This is preventative — a chance to cut down friction and cost before next year's work begins.

Once you've heard clear, grounded answers to these questions, you're in a position to sign with confidence. If you're still unsure about your accountant's explanations or their thoroughness, it's worth getting a second opinion before you commit. Finding a qualified bookkeeper or accountant on Strove who takes time to walk you through your statements ensures you understand exactly what you're signing.