- 5 Marks
Question
You have been engaged as an Accounts Officer in Abokobi LTD. Sales of GH¢10,000,000 were inadvertently under-declared. A team from the Ghana Revenue Authority (GRA) is at your premises conducting an audit. The GRA Audit Team did not review the sales revenue. After the audit, you noted that the amount constituting the under-declaration of the sales was mistakenly credited to the suppliers’ account in the ledger.
Required:
Detail out your position on the above as to what action to take.
Answer
As a professional adhering to ethical financial standards, the following steps should be taken:
- Notify Management: Immediately inform senior management or the finance director about the error in recording the sales revenue.
- Request for a Correction: Seek permission to adjust the financial statements to accurately reflect the sales revenue and correct the erroneous credit to the supplier’s account.
- Restate Tax Returns: Prepare a revised tax return reflecting the correct sales revenue and submit it to the GRA, ensuring full compliance with tax regulations.
- Make the Necessary Tax Payment: Calculate and pay the appropriate taxes due on the under-declared amount to prevent penalties or interest charges.
- Seek Professional Guidance: If necessary, consult with a tax consultant or the Institute of Chartered Accountants Ghana (ICAG) for advice on how to proceed.
- Report Ethical Concerns: If management refuses to correct the financial misstatement, escalate the issue to the appropriate professional body, such as ICAG.
- Consider Resignation if Unethical Practices Persist: If the company refuses to rectify the issue and insists on financial misrepresentation, resigning may be the last resort to maintain professional integrity.
It must be noted that audits conducted by GRA can be re-evaluated in the future, and non-disclosure could result in penalties and reputational damage.
- Topic: Tax Administration
- Series: Nov 2024
- Uploader: Salamat Hamid