One consequence of these events was the passage of Sarbanes–Oxley Act in the United States 2002, as a result of the first admissions of fraudulent behavior made by Enron. The act significantly raises criminal penalties for securities fraud, for destroying, altering or fabricating records in federal investigations or any scheme or attempt to defraud shareholders.[75]
For the salaried class of taxpayers, the responsibility of correct deduction of tax at source is thrown on employers. While in the case of a business or profession, they are responsible for declaring correct income. So, an employee may hide his other income and not declare to his employer in order to avoid taxes, and business owners also claim excess expense claims and deductions to reduce their tax burden. So in these cases, it takes backstage, and tax evasion/avoidance takes center stage.
The total sum of state and local income taxes, real estate taxes, and personal property taxes (such as car registration fees) up to $10,000, or $5,000 if you're married and file a separate return. You can substitute sales taxes you paid for income taxes if this is more beneficial for you, but you cannot include both sales and income taxes—you must choose one or the other.
By 1880, the modern profession of accounting was fully formed and recognized by the Institute of Chartered Accountants in England and Wales. This institute created many of the systems by which accountants practice today. The formation of the institute occurred in large part due to the Industrial Revolution. Merchants not only needed to track their records but sought to avoid bankruptcy as well.
Accounting is the process of recording financial transactions pertaining to a business. The accounting process includes summarizing, analyzing and reporting these transactions to oversight agencies, regulators and tax collection entities. The financial statements used in accounting are a concise summary of financial transactions over an accounting period, summarizing a company's operations, financial position and cash flows.