Geelong Gent

Should a Finance Director be able to sign authorisation of an interest free loan to themselves? Without advicing their North American corporate owners?

Then sign a statement saying the funds are being used for income earning measures to avoid FBT?

Have personal business (private rental property) expenses paid by the company through salary sacrifice?

Are these just perks of the job or am I just looking at a CPA with no morals?

Thoughts?

JAJ

Loans to corporate directors and officers are increasingly being frowned upon, and are pretty much banned in U.S. quoted corporations under the Sarbanes Oxley provisions.

There are three issues to consider here:

- possible breach of corporate internal control;
- possible problems with the Australian or U.S. corporate law compliance;
- fiscal issues (the ATO may view these kinds of loans as a form of remuneration).

And even if it's all above board, an FD should never be signing off on a loan to himself.

If the statement is false that that is serious unprofessional conduct at best, and possibly criminal tax fraud at worst.

Depends on whether this is tax compliant and provided for in his employment contract or not.

Geelong Gent

Thanks JAJ, thats exactly what I thought. I was completely flabergasted to find this and much more suspicious items. From a CPA as well - guess it just shows the void between CPA and CA.

Have faxed details through to our US office - have global sox team arriving Wedn week (Oh Joy).

JAJ

Don't assume CAs are incapable of getting mixed up in unethical or worse activities:, eg:
http://en.wikipedia.org/wiki/Rodney_Adler