ACC565 Week 10 Discussion 1 and 2 Essay

1254 Words Aug 30th, 2015 6 Pages
ACC565 Week 10 Discussion 1 and 2

Discussion 1
Imagine a situation in which a client under audit by the IRS omitted $100,000 in income. From the e-Activity, examine the major factors relative to the omission by the client that would result in a criminal investigation, rather than a civil fraud proposal by the IRS.
Evidence of Fraud It must be noted that any such activity comes under fraud or an attempt to miscommunicate to the stakeholders of the company. But there hardly is any way left for the officials to figure out it was a fraud or not since no direct proof is left. It is possible that the omission of this amount might have resulted from a misstatement or by mistake and was not
…show more content…
Furthermore, if the company is involved in some illegal activities and the income that has been missed from recording is basically arising from that then the company should be penalized.
Based on the scenario in the first part of this discussion, suggest at least one (1) strategy that the client should use in defense of a criminal case pursued. Provide a rationale for your response.
Based on the scenario, the client will try to defend itself. One strategy of defending itself is to make sure that it proves to the attorney that the misstatement was a mistake. It can show this by explaining every part leading up to the mistake and by clearly presenting the explanations to the authorities (Doty, 2007). If the company fails in proving that, it will be penalized more for lying as well as for fraudulent activity. Another thing that the company can use to save itself is that there are many layers of approval in the case of tax fraud at different levels of Department of Justice Tax Division together with that at IRS. This gives the company a chance to persuade every official one by one that this was not a fraud which is better than proving to all at the same time given that they would discuss it and will come to find the lie in it.
Doty, J. (2007). Corporate governance, 2007 (1st ed.). New York, NY: Practising Law Institute.

Discussion 2
Per the text, a U.S. parent company does not include the income of a foreign
Open Document