Financial Daily from THE HINDU group of publications
Sunday, Apr 25, 2004
Financial Daily from THE HINDU group of publications Sunday, Apr 25, 2004 |
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Corporate
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Accountancy Columns - Say Cheek Accountants are no magicians D. Murali
WHO says accountants can't be funny? A recent posting on the AccountingWeb is about some of the `funniest tax tales' from certified public accountants (CPAs) in Texas. Here is a doggy story to start with: A couple came to the accountant's office to prepare their tax return. They saw a picture of the CPA's dog and asked him, "Did we tell you that our dog had puppies earlier in the year." Accountant said, "No." Then, they told him: "We sold all six of the puppies for $400 each." Perhaps the photo reminded them of one of those puppies, but the accountant quickly multiplied six by 400 and he told the couple, "That means $2,400 income." Now, they start shifting in their chairs and at last say: "Oh, sorry, we meant we did have six puppies, but they all died, and we're still in mourning." Language can be a problem, as in this anecdote: After working on a partnership's books, a CPA sent the completed tax return along with a letter that said: "Each partner should pick up his or her share of deductions and credits on the applicable line of their personal tax returns." Soon, there is a call at the CPA's office from one of the partners: "Can you tell me where I can go and pick up my deductions and credits?" Perhaps, he had his pickup truck idling. Or, how about claiming a deduction for "the cost of looking good"? As AccountingWeb reports, a business owner asked his CPA if he could deduct the cost of his haircut. CPA said, "No." But the client argued: "Regular haircut is a legitimate business expense because having short hair is essential to attracting customers to my construction business." If our hairdresser lobby is strong enough, they should be able to lobby with the government for some Section 80HA(IR) deduction towards this cost. One may hear many such tales from our CAs too if only they were tickled enough. Because this is the time one seeks out the accounting tribe to give a shape to the year's tax affairs, and so you would most probably be entering the portals of your friendly CA sooner or later, it would pay to remember what's possible and what's not. First, if your friendly accountant promises that anything is possible, you may have to be cautious. From your side too, don't make an outlandish demand such as getting everything prepared with nothing to start with. True, there is a topic in accounting about `incomplete records' but even there you need some raw material to work on. Next, there are no magic wands. Accountants are not like flourmills where you put all bills and cash memos at the top and out flows the ledger after a few minutes. It takes time to lay the numbers to the left and right, in neat rows and columns, total them up, balance the sides, double-check to be sure, and get a hang of the numbers. Moral, therefore, don't make the CA office a whistle-stop if you're serious about your work. Third, there's no substitute for homework. Not a school lesson, but applicable to books and records too. Your responsibility doesn't stop with having an accountant to advise, or buying an accounting package. File your papers well, because in auditing, the elder brother of accounting, evidence is important. Last, don't forget to pay your CA the fee, because it pays to pay the piper who can play the tune that gets those gnawing rough edges off your books.
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