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Seven easy ways to protect your business from tax fraud!

by , 23 January 2013
White collar crimes like fraud and minor theft tend to be blown off by businesses as petty or not worth prosecuting. The general attitude is: 'Everyone does it'. But you won't get away with it - nor should your employees. Here are seven steps you can use to protect your own business from fraud...

White collar crimes are committed every day, according to Lungelo Hlongwa, MD of Anderson Harryson Consulting on Sunday World.

We don't get to read about them that often he says,  because nobody 'cares about some nerds who found a loophole in the company's processes and took a few hundred thousand or a few million rand!'

By somebody does care:SARS.

A court-appointed curator will approach the North Gauteng High Court to interdict tax fraud accused David King from interfering in attempts to attach his property, reports Barry Bateman on EyeWitnessNews.

King owes SARS more than R2.6 billion, and has been engaged in litigation with SARS for more than 11 years.

SARS isn't the only one concerned about rising tax fraud…

The five BRICS countries (Brazil, Russia, India, China and South Africa) have agreed to expand tax policy co-operation and step up their fight against tax evasion, according to RiaNovosti.

'We agree to extend the cooperation on the issues of tax policy and tax administration, including development of a BRICS mechanism to facilitate countering abusive tax avoidance transactions, promotion of effective exchange of information,' said a joint communiqué quoted on Ria Novosti.

Here's how you can take steps to avoid tax fraud or evasion in your own company

Those in charge of payroll departments need to work very closely with the internal auditing divisions of their companies to avoid fraud from slipping in, says Hlongwa.

But traditional controls on their own won't guarantee your business is safe from swindlers, warns The Practical Accounting Loose Leaf. A clever fraudster will cover his tracks well – and you won't know you've been defrauded 'til it's too late. It's not enough to just scrutinise your accounts every month to detect patterns that shouldn't be there. You must have good overall business controls in place to ensure your employees don't even think of fraud!

Follow these seven steps to ensure you have sound business controls

  • Step 1: Communicate and enforce ethical values
  • Step 2: Make a strong commitment to efficiency
  • Step 3: As the manager or owner, participate in the day-to-day running of the business
  • Step 4: Let everyone know your approach to risk-taking and filter it through the entire organisation
  • Step 5: Make sure you can achieve your company goals with the structure you choose
  • Step 6: Assign responsibility and authority to employees
  • Step 7: Implement proper HR policies and procedures when you recruit, orient, train, evaluate, counsel, promote and compensate your employees
For more information on protecting your business against fraud click here...


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