Dear Prof. Vinod,
Regards! I am a regular visitor and reader of your articles on web and have learnt many accounting concepts from these. Presently I am working as an Accountant with a construction contractor. My problem is that sometimes we have to withdraw money from company's bank account and then have to give that money as bribe to government officials or any other person. Another problem is that we can't change or modify the bank statement, so how and where to show these entries in accounts? Should we create some fake expenses account and transfer this cash transaction into that or if there is any other solution please guide and help me.
An early response in this matter shall be highly appreciated.
Thanking you in anticipation.
Ajay Singh from India
Ajay Singh! If you are honest, you can do three things for accounting of bribe.
1. Resign immediately
This is simplest way. You will not do the duty; you are not responsible for this type of corrupted activities. Start an educational institute in your city because accounting is science, it is not technique to cheat others. Bribe is poison. We should not mix poison in this great science.
2. Record Correct
It may be possible that you can not leave your this work. At that time, you can record correct. It means, you have to create the account of Bribe to Govt. Officer and pass the voucher entry.
Bribe to Govt. Officer (Name of That Govt. Officer) Account Dr.
To Bank Account or Cash Account
With this, you will give the hand to truth. This truth will give hand to you. Face this truth. Never use to record wrong expenses in your books because this is lie. With this, you will be responsible for this crime.
3. Change the System
Real accounting of bribe is to change system. In this way, record the list of all corrupt officers. Fight against them by starting anti- corruption movement. You will see that these type of movement are working in every city. With this way, your this contribution will be example for others new accountants.