In my banking days, if a ‘successful’ businessman presented annual financial statements showing abnormally hefty losses, I would ask him: where have the profits gone?

There are various ‘devious’ ways of creating such a situation, such as ‘phantom’ invoicing for consultancy/management fees, brokerage charges, overcharged inward supplies, diluted sale proceeds, etc.

An investigative analysis ofthe accounts could result in unearthing quite a few surprises. Queries to the auditors should also be made, if necessary, bearing in mind that, in spite of the auditors’ standard disclaimer, the observance of correct procedures followed would be certified.

Of course, if there is any doubt as to a conflict of interest arising between the business and the auditing firm, alarm bells would start ringing and the possibility of tax evasion and money-laundering activity should not be discounted.

Such an unsavoury scenario could unfortunately reveal that the profits may have ended up in some tax haven. In such a situation, the relevant authorities would have to be alerted for their investigation.

Tax evasion and money laundering are crimes and no bank or auditing firm should be accomplices thereto.