Implications of Check Float Strategy for Ahi Corporation

As the accountant of Ahi Corporation, I would not advise that the company send their check to the IRS from the Virgin Islands instead of its bank in Hawaii. The issue is, is that Ahi wants to find a way to earn extra revenue from its tax payment to the IRS by making sure the check has a long enough float time between the two banks to earn a substantial amount of interest. It is common for banks to earn interest from check float issues. As stated in an article published in the American Bankers Association Journal, “According to statistics compiled by J.D. Carreker & Associates Inc., float from cash items in the process of collection accounts often amounts to 3%-15% of a bank’s assets” (Nicholson, 1993). Float isn’t as common today as more bills

It address many ethical standards that those in the accounting profession are expected to adhere to, including client confidentiality, which is an issue in the case of Ahi Corporation. As the accountant for Ahi Corporation and learning how the company plans on earning interest money in an unethical way, the issue of confidentiality comes into play. As stated in the code, “A member in public practice shall not disclose any confidential client information without the specific consent of the client” (“AICPA”, pg. 124, 2014). Accountants are fully trusted by their clients to keep all information confidential, so Ahi Corporation is sharing this information voluntarily trusting that it will be kept as such. The Standards for Tax Services that has also been developed by the AICPA states, “A member should use professional judgement to ensure that tax advice provided to a tax payer reflects competence and appropriately serves the taxpayer’s needs” (“Form and Content”, pg. 27, 2010). As the accountant, I can give my advice to Ahi Corporation on what I believe would be the best option for the company in paying the IRS in an ethical way. 1 Timothy 6:10 is a verse that stands out in my head with the issue of unethical financial decisions as it states, “For the love of money is the root of all kinds of evils” (ESV). Ahi Corporation is trying to earn extra revenue in a way that wouldn’t be right, so it is best that they send their tax payment straight to the IRS from