CBO’s Client Testimonials Series – Avoided Penalty and Jail Term from IRAS
CBO saved a client from penalties and possibly jail term levied by IRAS.
CBO onboarded a new accounting client at beginning of this year and did some accounts clean-up for last 3 financial years.
This client had purchased some automated equipments at the same time, and made PIC claims successfully.
To account for these PIC Cash payout claims in the books, CBO tried to trace back to source entries in the books for evidence of actual spendings.
To our surprise, there were no trace of original entries of actual spendings in the books !
Upon further investigation, CBO discovered the business owner paid for these automated equipments using his own personal money, and has not submitted expense claims to the respective companies, but the latter made the PIC claims successfully!
To make matters worse, original vendors’ Invoices were missing!
To aggravate the matter, some of these automated equipments were missing in the company too!
IRAS requires the original invoices and evidence of payment as prerequisite for the PIC Claim, and thereafter requires the company to have custody of these equipment for 12 months before disposal.
None of these 3 conditions were met at all!
CBO scrambled to work with client to contact his previous equipment vendors to obtain copies of earlier invoices again, to obtain his past bank statements to trace payments, and did up Expense Claims for this client to pass back the expense to business, and physically retraced back these equipment subsequently.
The Accounts cleanup was finally done. Phew!
This client is now ready for PIC audit by IRAS, if any.
At the end of this exercise, the client remarked “Thank You CBO for being so meticulous ! You guys are so professional. “
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