From Lose Friends Radio comes this ‘Believe it or not’ segment Number 19, called ‘Hide and seek’. You can read the transcript below, or listen to the original broadcast by clicking on the green play button: [audio:Jonar_Nader_19_BION_Hide_and_seek.mp3]
Believe it or not, according to Jonar Nader, if you fear a tax audit, you might be interested in what a keynote speaker had to say at a business convention for accountants, held in Brussels recently.
Martin O’Grady, from Moon and O’Grady Partners, said that he surveyed over 3000 businesses who had been subjected to a tax audit in the previous twelve months period. Over 99% of them were issued with corrective notices of one form or another.
His studies led him to conclude that tax auditors don’t like to leave a ‘desk-audit’ empty handed so to speak. He said that auditors do not believe that any company can be squeaky clean so they start with a strongly-held belief that everyone is guilty of some form of, intentional or unintentional, malpractice.
O’Grady outlined a strategy that he called the ‘Hide and Seek Program’. He suggested that organisations should engineer very clever, low-risk, low-fine errors, leaving sufficient clues for auditors to follow.
“You need to think like the Joker did in Batman. You need to leave enough tantalising clues to distract auditors and lead them to an area of complex errors to which you can comfortably plead guilty, knowing that your legal exposure is limited,” said O’Grady.
“Auditors have time constraints placed on them. They need to find faults in your accounts in order to feel heroic about their achievements. By giving them something to sink their teeth into, they can walk away from an audit feeling that they have done their job,” he added.
His partner, Mr Moon, said, “In fact, auditors do not really want to find major irregularities because that would add to their arduous paperwork. Major incidents may end up in court, and that becomes too demanding for the auditors. For that reason, they are grateful if you give them something mildly interesting to detect so that they can walk away satisfied that they have done their job, raised some revenue, and kept the peace.”
Believe it… or not.
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