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  1. #11
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    As there seems to be no auditor or auditing process as well, maybe if you can, somehow suggest to the owner that your company needs it now as you feel this company is already growing or has grown for the past 5 years. If the owner asks how do you know it has grown, then maybe you can tell him something in confidentiality. Whatever you do, good luck mate!

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  2. #12
    Legend minimoke's Avatar
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    Quote Originally Posted by solved View Post
    Mini
    In response to clarify a couple of things, it is a small company and there is no large HR department or any internal processes to cover this sort of thing.
    Which brings me to the next part of your response. The boss is not the owner of the company and they have a very hands-off approach and to be honest would not have a clue about what is going on. Yes I have known for about the past five years and have really become aware over the past 12 months how prevalent it is.
    .
    Solved, OK that makes it relative straight forward.

    You go to the owner (not the police or IRD or anyone else) with the hard evidence you have at hand and you leave it to the owner to make the next call. Give them a call and say you want to speak urgently and confidentially with them and when suits. At this point I personally wouldn't be leaving an email paper trial with your name on it.

    You have a contractual obligation to look after your employers interests - that is the owner, not the boss. That may may make the ethical dilemma easier to figure out. Your owners likely reaction is to call in the police and a forensic accountant / auditor. No-one likes loosing large sums of cash.

    To give you an idea of the seriousness, your boss, given the time scale of the offending, and the amount, is looking at 2 years in jail and payment of reparations. If he doesn't have the cash this will be the sale of his house and other assets. When the stone is thrown in that pond the ripples will head out and impact more than your boss. If the accounts lady is complicit she may also be looking at jail time as well.

    Good luck. You know the right thing to do. Delaying does not make it any easier.

  3. #13
    Speedy Az winner69's Avatar
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    Minimokes advise is good

    The owner is going to be shattered when he finds out ...won’t believe it and all that

    Here’s a story about one poor bloke ....if all this true he’ll be glad you told him.
    https://www.nzherald.co.nz/business/...ectid=11390112

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  4. #14
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by minimoke View Post
    Solved, OK that makes it relative straight forward.

    You go to the owner (not the police or IRD or anyone else) with the hard evidence you have at hand and you leave it to the owner to make the next call. Give them a call and say you want to speak urgently and confidentially with them and when suits. At this point I personally wouldn't be leaving an email paper trial with your name on it.

    You have a contractual obligation to look after your employers interests - that is the owner, not the boss. That may may make the ethical dilemma easier to figure out. Your owners likely reaction is to call in the police and a forensic accountant / auditor. No-one likes loosing large sums of cash.

    To give you an idea of the seriousness, your boss, given the time scale of the offending, and the amount, is looking at 2 years in jail and payment of reparations. If he doesn't have the cash this will be the sale of his house and other assets. When the stone is thrown in that pond the ripples will head out and impact more than your boss. If the accounts lady is complicit she may also be looking at jail time as well.

    Good luck. You know the right thing to do. Delaying does not make it any easier.
    Excellent post that sum's the situation up well. There is a clear fiduciary responsibility to the organisation you work for to act in the organizations best interests and I think approaching the owner is the right course of action.
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  5. #15
    percy
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    Two ways.
    a]Should your boss be no relation to the owner, you approach the owner.
    b]Should your boss be related to the owner ,you approach IRD.

  6. #16
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    Quote Originally Posted by solved View Post
    Snoopy
    Also to clarify some of your comments it is not the case of overcharging clients it’s a case of altering documents and financial records to make it appear to the client that their financial income is less than what it actually was. For example, a client did earn $20,000 for a one month period but the boss altered the accounting system to show they only earnt $10,000, the rest of the money mysteriously disappears.
    With large companies most have a facility to report this sort of behaviour in confidence but the situation I’m in I feel I don’t have any options.
    Solved, I think Minimoke has given you good advice in post 12, even if it might not be so easy to execute in practice, depending on the relationship between the boss and the owner.

    My only caution is that you keep in mind that there are business practices that might be regarded as immoral, that are not necessarily illegal. For example consider the case of a clearance auction house business, disposing of end of line odd lots. Suppose such an auction raised $20,000 for a client. But the settlement paperwork was a cheque to the client for $10,000 (proceeds less all contracted fees). Let's say to get the goods for auction, our auction company charged a transportation fee, a fumigation fee, a 'check the buyer' for money laundering fee, an insurance fee (while the goods were in the auctioneers premises), an auction sales fee and debt collection insurance (in case the buyer does not pay promptly). Now let's say the total charge for all those services, as set by our Auction House business, was $10,000 (ignoring the actual cost of those services to the Auction house). Would such charging be regarded as immoral by you and I? Almost certainly yes. But is such a practice illegal? No.

    To check out if a particular business deal is illegal, you really have to know the terms of the contract.

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  7. #17
    Legend minimoke's Avatar
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    Quote Originally Posted by percy View Post
    b]Should your boss be related to the owner ,you approach IRD.
    IRD just wants its tax. This is not necessarily a ax issue.

    Any due / refunded tax will need to be calculated once the accountants have been through the books

  8. #18
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    Quote Originally Posted by minimoke View Post
    IRD just wants its tax. This is not necessarily a ax issue.

    Any due / refunded tax will need to be calculated once the accountants have been through the books
    It is a tax issue if company income has been misappropriated (ergo tax avoided), but IRD won't be likely to take the lead on this (unless Special Audit get involved which is very unlikely for a few hundred grand, or even a mill or two), IRD come in after or with the Police who need to do their thing. The case can be raised anonymously with the Police. But it won't get off the ground without evidence. If 'solved' can get a copy of the cash flow accounts and the bank statements, there will be a discrepancy and misappropriation.

  9. #19
    percy
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    Quote Originally Posted by minimoke View Post
    IRD just wants its tax. This is not necessarily a ax issue.

    Any due / refunded tax will need to be calculated once the accountants have been through the books
    Too often people ,in this case the owner,may not take action against a family member.Swept under the carpet,and whistle blower ,left hung out to dry.
    A good healthy tax audit will/should show up the offending,and the whistle blower is left alone.
    Serious money is being stolen.

  10. #20
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    Quote Originally Posted by percy View Post
    A good healthy tax audit will/should show up the offending,and the whistle blower is left alone.
    Serious money is being stolen.
    I'm not sure how IRD work nowadays. Back in the day they would audit prostitutes (which back then was an illegal activity. They didn't dob in the prostitute - they just wanted teh tax

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