Record keeping

• Overall


  All accounting processes depend on how accurately and honestly data are recorded in financial reports

  Source documents must be created for every transaction, even those in which cash has changed hands → there is a temptation in some cases to receive payment in the form of notes and coins, and not record the transaction. If cash received in this way is not recorded, it will not show up as business revenue, and will reduce the business's profit for the year, possible resulting in a lower tax burden
• Impact on the business


  While reducing the tax burden in this way may be tempting, the ATO regularly monitors business operations and those found to be evading their taxation responsibilities can receive fines far in excess of the amount that may believe they have saved in tax

  Prosecutions for tax evasion can harm the reputation of the business, and alienate customers who wish to deal with honest and ethical businesses