Internal Audits Fix Financial Accounting Problems –
IN A NUMBER of cases, personnel will take advantage of a tax risk weakness to give a benefit in favor of a connected person to the potential detriment of the business. In the absence of strict internal auditing being performed in the area of payroll taxes , opportunities abound for personnel to apply lax standards to taxing benefits or perks granted to certain employees. In other areas, independent contractors will be granted favorable terms, with the minimum deduction or no deduction of payroll taxes, to their benefit, but to the detriment of the business. If any discrepancy arises, the IRS will look to the business to make good any shortfall.
This type of collusion can be avoided by communicating to the personnel and payroll departments that thorough and frequent internal audits should be conducted.