Why accountants are conformists rather than activists? (part one)

I have a theory that’s not going to be very popular among accountants. They may agree in private but may contest in public. The theory is this “most accountants are conformists because the market pressures them to be activists”.

Accountants, especially designated ones, may be held financially liable in the event there is something wrong with an income tax return (or review/audit etc). The market (ie. clients) place pressure on accountants to report earnings/expenses in a format that may not (or will not) survive a CRA audit. Here are a couple examples:

Using a personal vehicle for business is a legitimate expense. However, if the person is self-employed they must keep a vehicle log which shows the personal to business ratio (how many business miles used compared to total miles logged). If 22% of the miles were traveled for business than 22% of the cost of operating the vehicle are expensed. Without a log of business to personal travel how is an accountant or auditor to know what percentage to expense? Every good accountant KNOWS this is the law! However, if an accountant tells a truck driver that he/she CAN’T expense anything on their vehicle without a log book most clients would walk out the office and seek an accountant who allows something (try and get a trucker to keep ANOTHER log book).

So the accountant has an ethical choice. What (in his mind, or in the mind of the average auditor) is a reasonable percentage or figure to expense? Thus the “self-deception” and market “disinformation” begins. The accountant has convinced themselves to become an income tax activist. They are cutting corners. Their internal conscience nags them that under audit they may well be taken to the cleaners. They are vulnerable and they know it. Therefore they become “conformists” by desperately trying to stay off the CRA “radar”.

Another example is the “non-use” of TL2’s for meal deductions. By now all well informed accountants know that self-employed operators require meal receipts as expenses. They are not allowed to use the TL2 any more. However, many calculate meal expenses using $51.00 per day and place the dollar figure in “8523” where the total of all meal receipts should to go. This means under audit, when asked for verifying receipts, there will be none. OPPS! No wonder many accountants are emotionally hiding under their desks at the thought of an auditor.

One more theory! “Compliance builds confidence, and confidence endorses boldness”. Do you want to know why I wrote my book the way I did? Or maybe why I write the way I do? My passion is justice and equality in a system of compliance not self induced cowardice.

Vivi La Avant-garde!

I don’t expect to be sent invitations to Christmas parties. Oh well!