Sounds like a college course, doesn' t it?
Welcome to tax season! I am an Accounting major, and I am graduating very soon. Looking for a job, too, but that's beside the point, unless you're looking for an accountant.
I recently learned that, under the rules of the American Institute of Public Accountant's Code of Conduct, if I find a mistake on someone's previous tax return, I am supposed to tell the client about the error and leave it at that.
Now, a mistake is unintentional. Nothing illegal about making a mistake on your tax return. However, when a mistake is found, and you fail to rectify it, isn't that tax fraud? Also, it probably was not even a mistake to begin with if this person will not fix it. If this person I tell about the mistake does not fix it, I am supposed to dissassociate myself from him. I cannot tell the government about it. I cannot report him to anybody. He has broken the law, and I can't do anything about it. To me, that is crazy!
Why shouldn't people ignoring their civic duty to pay taxes have consequences? Aren't accountants supposed to be the policemen of the financial world? That's what I thought when I got into accounting. I guess I was wrong.
Enron went down for a lot of reasons. The fraud that went on there is beyond the scope of this article. However, one of the reasons that it seemed to happen overnight was because of the auditors. They became consultants instead of auditors, working for the executives instead of making sure the reporting was accurate. I believe that as an auditor that is your job, making sure the financial reporting is fair in accordance with whatever standards are involved. When the client says "I want to avoid reporting a loss," the response can't be "Well, let's find a creative way to avoid reporting that." It should be, "Did a loss happen? Then you need to report it." End of story. Accounting should not offer loopholes around economics.
This is my first Joe User Article. I hope for there to be many more in the future, about the Accounting profession, games, parenting, marriage, everything. Thank you for building a great community for me to be a part of.