This article focusing on statutory payments is part of HLB Mann Judd’s fraud review series which takes a closer look at potential areas of fraud and provides tips on how to reduce fraud.

There are various ways an individual can manipulate statutory payments to conduct fraud. We examine two opportunities for fraud being via returns lodged with the Australian Taxation Office (“ATO”) and superannuation payments.

ATO returns

If income tax returns, business activity statements, fringe benefits tax returns and payroll tax returns are completed by an in-house accountant, it is possible for calculations to be manipulated and funds redirected to another bank account.

Tips

  • For lodgements and amendments, require approval from a senior employee independent from the finance function in the company, ensuring a check of bank details forms part of the review.
  • Review historical trends of ATO payments/refunds and enquire if amounts appear unusual.

Example: An in-house accountant amends a tax return which previously overstated the amount payable, resulting in a refund. The in-house accountant updates the bank account details in the ATO portal to redirect the refund to themselves.

Superannuation payments

If you are not using a superannuation clearinghouse to make payments to employees, employees can alter superannuation details to redirect payments to their own accounts.

This type of fraud is easily missed by employees.

Tips

  • Encourage employees to regularly check their superannuation account.
  • Review authorisation process for changing employee superannuation details to make sure it is adequate.
  • Use a clearinghouse to make payments.
  • Ensure rejected payments are correctly resubmitted.

High risk: Most employees do not check their superannuation balances and would not identify missing payments.

How HLB Mann Judd can help you

No business is fully protected from fraud. Management must consider what their fraud tolerance is and determine what processes best mitigate fraud.

The Corporate Advisory division at HLB Mann Judd are experts in assisting businesses identify and alleviate fraud.

If you or someone you know are concerned with the scope of fraud in statutory payments, or any other aspect of the business, our team can assist to identify risks, test identified areas and provide specific recommendations to protect against fraud.