The case of Jacques’ bad trade
Charles Selcer, CPA, MBA | September 2020 Footnote
Editor's note: Updated August 31, 2020
Jacques Ofalltrades, CPA left public accounting to become CFO at Frack Daddy, a supplier of fracking supplies to the oil industry. The oil industry’s current funk has trickled down to Frack Daddy, curtailing cashflow. The company made some tough decisions, including delaying remittance of withheld payroll taxes for six weeks for the foreseeable future, creating a situation where, at all times, the Frack Daddy is six weeks in arrears. Jacques figured it would be OK if the arrearage didn’t increase.
Q. Is this unethical?
A. Yes. Members in business must adhere to Code Section 2.400.030, which states that failure to comply with, “the timely remittance of all payroll and other taxes collected on behalf of others,” may be considered an act discreditable to the profession.