There's tax fraud based on incomplete or inaccurate figures in accounting documents, and there's tax fraud where your entire business is based on a lie.
reports that Indian tax
authorities have accused the local unit of chocolate giant Cadbury of evading $46 million in tax
es by pretending to produce sweets at a factory that did not exist, a report said on Wednesday.
It adds that Cadbury India went so far as to manipulate accounting invoices and other documents to get tax exemption.
This comes as India has aggressively stepped up its tax collection drive against multinational firms operating in the country, in a bid to raise revenue and reduce a ballooning fiscal deficit.
Locally, SARS is also stepping up its tax audits in an attempt to add more tax money to its coffers.
There's a good chance your business will face SARS' scrutiny...
That's why now's the time
to make sure your business' accounting
records are accurate.
Luckily, FSP Business
says it's easy to protect your business from tax fraud
so you don't face the wrath of SARS
So it's not enough to just scrutinise your accounts every month to detect patterns that shouldn't be there.
You must have good overall accounting controls in place to ensure your employees don't even think of committing tax fraud!
Key among these is to communicate and enforce ethical values, and to assign responsibility and authority to employees responsible for your business accounting.
By making employees accountable for the severe consequences, you'll be more likely to keep them on an ethical accounting path and avoid the nightmare of having your business accused of tax fraud.
If you need more information on all the accounting records
you need, get your hands on The Practical Accountancy Loose Leaf
. In the Practical Accountancy Loose Leaf
we've got a dedicated chapter on accounting records
. In it you'll discover:
What are accounting records?
Checklist: What do accounting records generally consist of?
Why it's important for you to keep accounting records
3 risk areas to watch out for
Risk #1: Unauthorised access and manipulation
Risk #2: Manipulation of accounting information
Risk #3: Loss of financial information
Get the Practical Accountancy Loose Leaf