Cookin’ the Books: Identifying Financial Red Flags in Contractor Financial Statements

Contractor financial statements tell a story—but is it the whole story? Join CPAs David Jean and Ben Lord from ARB’s Construction Industry Services Group for this presentation, designed for surety underwriters and bond producers who need to evaluate contractor financial strength, bonding risk, and the reliability of reported earnings. David and Ben explain how profits can be concealed or uncovered through manipulation of assets, liabilities, underbillings, and contract schedules. They also highlight warning signs that may indicate financial statement concerns and outlines practical verification steps, such as reviewing historical performance, subsequent contract schedules, and financial statements. By focusing on common areas of financial manipulation, it helps sureties and bond agents ask more informed questions when assessing contractor risk. Whether you are new to reviewing contractor financial statements or looking to sharpen your analytical skills, this session will provide valuable insights to help you better evaluate contractor performance and risk.