Scenario - ahi corporation is one of your clients in hawaii

Reference no: EM13376635

Scenario - Ahi Corporation is one of your clients in Hawaii. The company had a good year last year and owes the IRS $100,000,000, due on March 15. There are no penalties or interest due to the IRS. One of Ahi's employees approaches you with the following plan to benefit from the so- called " float" on the large payment due to the government. First, Ahi Corp. will courier its tax return and payment to the U.S. Virgin Islands. There, the tax return will be mailed to the IRS Service Center in Fresno by certified mail on the return's due date, March 15. By doing this, the employee thinks it will take at least six days for the tax return to reach the IRS and for them to cash the $100,000,000 check. Ahi can earn 7 percent after tax on its money, so the interest earned during these six days because of the float is $19,178 per day [($100,000,000 Af- .07/ 365 days]. Thus, the total interest earned on the float for six days would be $115,068 ($19,178 Af- 6 days).

1. Would you recommend Ahi complete this transaction?

2. What potential ethics issues do you see in this situation?

3. Which AICPA Code(s) of Professional Conduct rules apply in this situation (explain how and why they apply)?

4. Which Statement(s) on Standards for Tax Services apply in this situation (explain how and why they apply)?

5. Cite the specific verse(s) for at least one Biblical principle that you feel is relevant to the situation (explain how and why it applies).

Reference no: EM13376635

Questions Cloud

As the representative from your accounting firm or practice : as the representative from your accounting firm or practice you are in charge of stock market analysis that will be

Computer boutique sells computer equipment and home office : computer boutique sells computer equipment and home office furniture. currently the furniture product line takes up

Algers company produces dry fertilizer at the beginning of : algers company produces dry fertilizer. at the beginning of the year algers had the following standard cost sheetdirect

Select a publicly quoted company obtain the annual report : select a publicly quoted company. obtain the annual report 10-k of the company for the immediate past year. an

Scenario - ahi corporation is one of your clients in hawaii : scenario - ahi corporation is one of your clients in hawaii. the company had a good year last year and owes the irs

Internal financial information is not available to the : internal financial information is not available to the public so we have to rely on external information for our

Even when objectives are clearly stated the reasons they : even when objectives are clearly stated the reasons they have not been met may not be easy to discern.the city on the

Performance audits are often far removed from financial : performance audits are often far removed from financial audits but even seemingly unauditable programs can be

The cpa firm of which you are a manager has placed you in : the cpa firm of which you are a manager has placed you in charge of the audit of the thornburg school district.the

User Account

All Pages