Financial fraud concerns that will impact tax fraud against corporates

ATL-Editor 10 October 2019

There is a growing concern that accounting practices are bordering on rubber-stamping what could be classified as fraudulent activities. “Fraud” is widely defined as: “a person or thing intended to deceive others, typically by unjustifiably claiming or being credited with accomplishments or qualities.” AND “wrongful … deception intended to result in financial or personal gain…”[which also covers criminal deception – where intent to deceive can be proved].

That is wide.

So if financial statements can be proven to be fraudulent, that opens the door to tax fraud and jail sentences, as tax returnsA Tax Return is a formal statement filed by an individual or entity that details income, expenses, and other pertinent tax information to a tax authority. Its primary purpose is to assess tax liability, determine refunds owed, or highlight outstanding taxes due. Tax returns may include information about earnings, capital gains, allowable deductions, and credits, depending on the tax regulations... are based on financial statements. If you as officers of the taxpayers are “blind” to the “potentially fraudulent rubber-stamping by auditors” that could place you in a very precarious position, criminally. No officer of a company wants to face that. Blame it on your auditors, but if you are complacent you could be a co-conspirator – also GUILTY. So it is no longer a defence that you hide behind your auditors.

Please read the attached articles

Are Public Company Auditors Complicit in Financial Statement Frauds?Download

Causes, Consequences and Deterence of Financial Statement Fraud Download

Categories: FP News

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