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Wednesday, 23 July 2014 05:40

THIS COULD BE YOUR BUSINESS LIMITED

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Problem Solving

 

THIS COULD BE YOUR BUSINESS Limited  received a GCT Assesment of  approximately $5,200,000.00.

 

                    TAXES                  INTEREST           TOTAL

2008        $750,000.00           $640,000.00    $1,390,000.00

 

2009       $600,000.00           $500,000.00    $1,100,000.00

 

2010      $800,000.00           $450,000.00     $1,250,000.00

 

2011      $300,000.00           $250,000.00     $   550,000.00

 

2012      $400,000.00           $120,000.00      $   520,000.00

2013      $363, 000.00           $170,000.00      $   553,000.00

 

The TAAD Representative having audited the books of : THIS COULD BE YOUR BUSINESS Limited  found

that the sales reported in the accounting records for 2013, produced a significant variance when compared to the Sales schedule supporting the Sales reported on the GCT return . The Financial Statements reported Sales of $22, 000,000.00 while the Sales per GCT schedule $19,800,000.00 after the application of a 10% discount.  The Tax representative accepted the sales reported in Financial Statements and therefore applied the GCT rate to the amount deemed under reported. The TAJ representative next applied the same principle to prior years  2008- 2012. Penalties and interest were also charged.

 

 

The CEO complained and argued that the GCT schedule correctly adjusted the revenue for the discount granted to customers. However, the system did not reflect same because the accountant had incorrectly posted the discount as an expense.

What were the issues facing the CEO of THIS COULD BE YOUR BUSINESS Limited?

 

The CEO and the accountant were not very conversant with accounting principles.

The accountant did not understand nor did he utilize the software program effectively. As a result he correctly reported the GCT sales using a manual application. However, he did not compare the sales total on a monthly basis to the system totals. The CEO was easy going, having recognized the discrepancy,  failed to ask the accountant to correct same. 

 

 Questions and Answers that CEO’s should consider before receiving such an assessment.

Please  utilize FAQs,  questions and answers on the portal as under-noted.

What every CEO should know and observe?  

What You should Know about Your accounting software  ?

 

Culture: Is it necessary to have a vision statement for the business?

Culture:   How does ones see or view corporate behavior?

How to establish the right vision  for the organization?

 

 

 

 

 

 

 

Read 3082 times Last modified on Saturday, 03 January 2015 14:41

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