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News & Press: EDITORIAL

Accounting for the underworld

Thursday, 27 March 2014   (1 Comments)
Posted by: Nicolaas van Wyk
Are accounting services amoral? Does it matter what type of business your client is in? Do we just collate the information presented to us without regard to the source of the information? 

Consider the following three cases. In Colorado recreational use of marijuana has been legalised. This has enabled that State to generate new tax revenues. Apparently marijuana shops now outnumber Starbucks branches in the state capital Denver. 

As an accountant would you prepare financial statements for a marijuana shop? Would you have done so prior to the product being legalised? 

A former playboy playmate has been sentenced to one year in jail – because she did not declare her “gifts” from services delivered to a German brewery heir. These gifts reportedly included cash, cars, jewellery, exotic holidays, shopping sprees and an apartment, which she later sold without paying tax. 

As an accountant would you have prepared financial statements for this business? As an accountant do you just apply the rules of accounting to the numbers presented to you? Or are you required to apply moral judgment in questioning the source of the income?

Before you answer, consider the last case.

During World War II at the direction of SS Lieutenant-General Pohl accountants prepared financial statements for Concentration camps that leased out their prisoners to for-profit corporations. General Pohl’s accountant meticulously applied accounting rules: life expectancy for workers are set at nine months, as this is the life expectancy from the time of initial employment. Other revenue represents valuables and currency taken from the employee, gold extracted from the teeth of the deceased, and revenue on sales of personal clothing, hair, fat for soap, and ashes for fertilizer. 

Is accounting still amoral? Should we be more careful and circumspect as to the type of clients we elect to serve? 

As accountants we are in possession of scarce skills and competencies. Not all clients deserve our attention. We need to respect ourselves and our abilities. 

Editorial - SAIBA Newsletter  
March 2014
Nicolaas van Wyk 


Louisa L. Ngcobo says...
Posted Saturday, 29 March 2014
Dear Mr Nicolaas I personally would not offer any accounting services to the business that I have different moral values as mine, e.g liquor store or shebeen. I believe that we all have different values and will deal with the thing differently.

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