banner_ad

Can we account illegal expenses?

Others 775 views 3 replies

Hi Guys,

 

While auditing accounts of one Construction company, I came across some CASH expenses they have incurred for paying BRIBES to various Govt officials. No doubt that these are illegal expenses and disallowed.

 

But my question is – CAN WE RECORD THESE EXPENSES IN BOOKS AND LATER DISALLOW THEM?

 

Becoz accounting and tax audit, statutory audit are two different concepts. If we refer the accounting standards, it is not mentioned that company cannot record illegal expenses BUT in audit it is mentioned that they are disallowed.

 

My Principal (Auditor of Company) was of the view not to show them in books of accounts whereas I was of the view to account them first and later to disallow it.

 

Kindly suggest me – what is correct and if my view is correct then whether it is practically followed by you people also?

Replies (3)

Very Funny  and aptly said It is prohibited to do illegal business but it is perfectly legal to record illegal expenses in Books 

According rule We can not accept those kind of Expenses, but we should pay some of payments likes that  situationally. so we will show those payments  as legal expenses. We are not able ignore those kind of expenses. Try to control Thats it.

Thnx to both of you for replies


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
ARTICLESHIP 28 May 2026
Accounts, Audit & Compliance Executive

Shyam Joshi & Associates

Pune

B.Com

View Details
Company
23 May 2026
Account Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
23 May 2026
Article Assistant

Geeta Manchanda & CO.

New Delhi

CA Inter

View Details
Company
14 May 2026
Senior Associate

ABHISHEK SHANKAR AGARWAL & ASSOCIATES

Kolkata

CA

View Details
Company
ARTICLESHIP 15 May 2026
Audit Assistant / Article Trainee / Intern

SSGS and Associates

Chennai

CA Inter

View Details
Company
26 May 2026
Senior Accountant cum purchase Manager

Vardhaman Group of India

Pimpri Chinchwad

CA Inter

View Details
Company
27 May 2026
Audit Assitant

Virender K Gupta and Co

New Delhi

B.Com

View Details