CS Professional · IFSCA - Regulations, Listing and Compliances · Book-keeping, Accounting, Taxation and Financial Crime Compliance Services and TAS
Prakash Tax Services IFSC, an authorised provider, prepares the tax computation of Zenith Fund Manager, an IFSC unit. During the work, Prakash discovers a material misstatement the client refuses to correct. Which course is most consistent with the compliance and ethical expectations of a regulated provider?
Prakash should decline to associate with the known misstatement, document the matter and evaluate any reporting obligations. Signing it, destroying working papers or relying blindly on the client would breach the integrity and record-keeping duties expected of a regulated service provider.
- ASign the computation and note the issue in internal files only
- BDelete the working papers so the issue cannot be traced
- CAssist the client's filing by relying on the client's representation without further inquiry
- DDecline to associate with the misstatement, document the matter and consider reporting obligations under applicable lawCorrect
Explanation
A regulated provider must maintain integrity and cannot be party to known misstatements. It should document the matter and evaluate reporting duties. Signing, destroying records or blind reliance would breach professional and compliance duties, and destruction of records is itself a violation.
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