Hello, everyone.
This is Enta.
The Relationship Between Embezzlement at a Major Company and Its Subcontractors (Part 1)
This time, I'll talk about how to embezzle from your own company lol
Does anyone here know anyone who’s embezzling from their company?
You know that, right?
Especially the major companies.
I suppose there are some cases like that when it comes to major local companies or local general contractors, though.
So, how exactly is embezzlement carried out?
There are various forms of embezzlement, ranging from minor cases to large-scale ones, but ultimately, it is a crime, so please be careful.
The reason I know this is that anyone at this level would think of it.
It would be easy for any ordinary construction manager.
Of course, this kind of tactic...The tax office keeps a close eye on thingsand,
In cases such as tax audits, we will naturally focus our scrutiny on those areas without fail!
If you know this, you can take steps to deal with it.
However, there are cases where it is impossible to take countermeasures.
I'll also list the pros and cons.
Embezzlement Involving Subcontractors
1. Inflating the reported amount of work completed to receive money from subcontractors
Benefits for Embezzlers: They obtain money and other assets
Demerit for Embezzlers: Crime
Benefits of Outsourcing: The company’s output increases and profits rise (output exceeds the amount paid out)
The Downside of Outsourcing: It Can’t Be Counted as a Company Expense, So It Comes Out of the CEO’s Pocket
Measures: Verify construction progress, daily construction photos, and attendance, etc.
2. Increase the unit price of temporary rental equipment used in construction and arrange for the delivery and receipt of the items from the rental company
Benefits for Embezzlers: You can get your hands on golf equipment, air purifiers, and other items
Demerit for Embezzlers: Crime
Benefits of outsourcing: It increases the company’s revenue and profits, and the goods can be recorded as expenses.
Disadvantages of outsourcing: Depending on the amount (200,000 or more), you must depreciate the assets annually, even if they are not actually present. (This appears on the financial statements.)
Countermeasures: Regularly seek feedback from others and verify the reasons for unit price changes, etc.
3. Passing on receipts for entertainment expenses paid to the general contractor to the subcontractor.
The benefits for embezzlers: They can treat others to meals and drinks without worrying about the cost.
Demerit for Embezzlers: Crime
Benefits of Outsourcing: Receipts can be claimed as business expenses, and there’s a sense that you’ll continue to receive work
The Downside of Outsourcing: Entertainment and Hospitality Expenses Disproportionate to the Company’s Size (A Cause for Concern for the Tax Authority)
Countermeasures: Subcontractors’ work volume, evidence of inflated construction costs, and reconnaissance of the general contractor?
4. Demanding money in exchange for a construction contract
Benefits for Embezzlers: They obtain money and other assets
Demerit for Embezzlers: Crime
Advantages of outsourcing: You receive payment for the construction work in a form that provides a certain level of compensation.
The downside of outsourcing: Since the costs can’t be recorded as expenses, they come out of the CEO’s own pocket.
Solution: It's difficult when it's phone-to-phone. I think this is the worst kind.
5. Forging receipts and passing them on to subcontractors (this applies to our own company as well)
Benefits for Embezzlers: They receive more money or other assets than they paid for
Demerit for Embezzlers: Crime
Benefits of Outsourcing: Expenses Can Be Deducted
The Downsides of Outsourcing: You Might Be Unwittingly Drawn Into a Crime
Action: Verify the T number; check with the store that issued the receipt; confirm whether a revenue stamp and seal are present
It's pretty much the same thing over and over again.
And the people who can do this are those in positions of authority.
I think most of them have the authority to approve financial decisions.
As for those with malicious intent, the other day...
Just like a certain company, they keep spending outrageous amounts of money year after year.
Anyway, that's it for now lol
Next time, I’m going to write about why people embezzle—and whether “Isn’t this a good idea?” might be a factor.
See you later.
