Instruction: Read the following scenario study and respond asper the following requirements: Benjamin, the...

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Accounting

Instruction: Read the following scenario study and respond asper the following requirements: Benjamin, the owner of a smallconsultancy in Victoria, thought he could boost his income bycreating false companies and submitting fraudulent activitystatements to the ATO. Thinking that the sheer volume of activitystatements the ATO processes would allow him to slip under theradar undetected, he created 17 bogus companies and submittedfraudulent activity statements for each of them. However, insteadof the hefty GST refund he expected, Graham received a rather severlesson in the ATO’s ability to detect fraud and evasion by workingwith other government agencies, on this occasion, the AustraliaFederal Police. The ATO quickly identified his claims as suspect.Before GST refunds are issued, all claims are automatically checkedagainst a set of criteria to detect incorrect or fraudulentstatements. In this case, the GST Identity Fraud Model picked upsome very clear fraud characteristics in the series of activitystatements lodged. Once detected, the ATO undertook a detailedinvestigation where it became evident that a serious offence hadoccurred. His home and business premises were raided and documentsand his laptop computer seized. Computer forensics easily detectedthe fraudulent driver’s licences, passports and birth certificatesused to register the bogus companies and create bank accounts forthe GST refunds. Benjamin was charged with obtaining and attemptingto obtain a financial benefit by deception. He was sentenced tofive years imprisonment and had to pay $312,075 reparation. Thejudge said that fraud on the Commonwealth revenue was a seriousoffence which must be dealt with by way of custodial sentence. Hepointed out that it was not just fraud on the ATO but fraud on thecommunity as a whole.
Requirements: i) What review techniques ATO may have applied toanalyse evidence of non-compliance to diagnose origin of fraudulentand dishonest business operations of Benjamin?
ii) What are the evidences of non-compliance which prompted ATOto conduct an investigation and develop a resolution?

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4.4 Ratings (597 Votes)

I Benjamin in this case was expecting a refund of GST which he claimed by creating bogus companies and submitting false activity statements GST refund is the result of higher input tax as compared to output tax Now what he must have done is that he created bogus input bills and bogus output bill Review techniques ATO may have applied to analyze evidence of noncompliance to diagnose origin of fraudulent and dishonest business operations of Benjamin Business Activity Statements also record amounts of tax other than the GST See Answer

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In: AccountingInstruction: Read the following scenario study and respond asper the following requirements: Benjamin, the owner...Instruction: Read the following scenario study and respond asper the following requirements: Benjamin, the owner of a smallconsultancy in Victoria, thought he could boost his income bycreating false companies and submitting fraudulent activitystatements to the ATO. Thinking that the sheer volume of activitystatements the ATO processes would allow him to slip under theradar undetected, he created 17 bogus companies and submittedfraudulent activity statements for each of them. However, insteadof the hefty GST refund he expected, Graham received a rather severlesson in the ATO’s ability to detect fraud and evasion by workingwith other government agencies, on this occasion, the AustraliaFederal Police. The ATO quickly identified his claims as suspect.Before GST refunds are issued, all claims are automatically checkedagainst a set of criteria to detect incorrect or fraudulentstatements. In this case, the GST Identity Fraud Model picked upsome very clear fraud characteristics in the series of activitystatements lodged. Once detected, the ATO undertook a detailedinvestigation where it became evident that a serious offence hadoccurred. His home and business premises were raided and documentsand his laptop computer seized. Computer forensics easily detectedthe fraudulent driver’s licences, passports and birth certificatesused to register the bogus companies and create bank accounts forthe GST refunds. Benjamin was charged with obtaining and attemptingto obtain a financial benefit by deception. He was sentenced tofive years imprisonment and had to pay $312,075 reparation. Thejudge said that fraud on the Commonwealth revenue was a seriousoffence which must be dealt with by way of custodial sentence. Hepointed out that it was not just fraud on the ATO but fraud on thecommunity as a whole.Requirements: i) What review techniques ATO may have applied toanalyse evidence of non-compliance to diagnose origin of fraudulentand dishonest business operations of Benjamin?ii) What are the evidences of non-compliance which prompted ATOto conduct an investigation and develop a resolution?