Ethics in tax remittance processes

Posted: September 6th, 2013

Ethics in tax remittance processes

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Ethics in tax remittance processes

It would be highly detrimental for Ahi Corporation to complete the proposed transaction. This is because the multiple ethical irregularities that are present would put the company’s operations at jeopardy. The opportunity for employees to exploit the transaction process for their own personal gain displays a problem with the current system. First, the misappropriation of the firm’s money can cause lawsuits for the employee and his accomplices.

AICPA refers to a national organization that is composed of Certified public Accountants and having over 37,000 members in the form of companies. The AICPA Code of Professional Conduct is an official document containing the principles and rules that govern the behavior of professional entities. Part of the AICPA Code of Professional Conduct particularly Section 54 states that integrity is an important part of conducting business affairs. Integrity is expected among the members who should be honest and confidential. In doing so, the information on the tax advantages that Ahi Corporation will enjoy because of remitting their taxes should not be disclosed to any other party other than the ones involved (Ranweiler et al, 2002).

Statements of Standards for Tax Services

These statements (SSTS) are tax practice standards that apply to all members of the AICPA. These statements apply uniformly to all members and all manners of taxes. Through SSTS for example interpretation no. 1-1, companies who are members can receive guidance on the most realistic standards. Ahi Corporation and all its employees should be briefed on the consequences and benefits of engaging in tax remittance activities. Privately benefiting from the tax payment process is a breach of this statement that describes the behavior of the taxpayer who in this case is the member’s employer (Palan et al, 2010).

The Statement on Standards for Tax Services No. 2, Answers to Questions on Returns clearly defines the need for any member to obtain information that would enable them to answer all questions on tax returns before authorizing it. This may involve inquiring into the method of payment, the duration taken and the parties involved. The employee would be committing an ethical offence by engaging in their own personal plans to make profit off the company’s money. While Ahi Corporation is aware of the proper expected channel that their tax remittance will follow, the employee will disrupt this process (Malcomnson et al, 2006).

The Statement on Standards for Tax Services No. 7, Form and Content of Advice to Taxpayers dictates that all members of the AICPA should be advised on the proper channels to follow when new developments occur that might have an effect on the advice that was previously given. It states that the member should use professional judgment to be competent and serve the needs of the taxpayer. The employee acts contravene the provisions in this statement that vilify misappropriating the office and tax loophole to make money from company taxes. The employee can also be charged with wrongful conduct as an individual who was not authorized to handle the tax remittances (Ciulla et al, 2007).

Relevant biblical principle

The principle of honor and honoring God’s character is relevant in addressing the ethics issue with the employee. God is the ultimate provider of all blessings and advantages. This is found in Corinthians 4:7. Human beings should therefore avoid bringing dishonor to God’s name and their own name by participating in actions that would seek glory for themselves. The employee must also be obedient and loyal to his company and his God. In Colossians 3:22 and 24, the bible instructs workers to be obedient even when their employers are not vigilant or alert. This is because God is the overall boss of all human beings and everyone should serve him.

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