On the other hand, if the backdating is intended to fabricate documents to support a transaction that never occurred, in particular to gain a tax advantage for a client, that’s almost always a sign of fraud, experts say.
The Mossack Fonseca files show, according to ICIJ, that the firm’s backdating was so common that a 2007 email exchange between employees proposes establishing a pricing structure — clients would pay .75 for each month farther back in time that a corporate document would be backdated.
Also see: This state is among the most popular tax havens But lawyers have a more nuanced view towards backdating.
“To the layperson, backdating connotes wrongdoing,” writes law professor Jeffrey L.
Kwall of Loyola University of Chicago’s law school, depends largely on which of the two actions has occurred.
Also see: 5 things to know about the Panama Papers In a written response to questions from ICIJ and its media partners, the firm said that backdating documents “is a well-founded and accepted practice” that is “common in our industry and its aim is not to cover up or hide unlawful acts.” Erik Lie, a finance professor at the University of Iowa, published an initial study in 2005 and then another in July 2006 that said more than 2,000 companies had used options backdating between 19 to reward senior executives.
That’s because of the stock option backdating scandals and based on rules and standards that consider backdated documents less reliable supporting evidence for financial statement numbers or evidence for an audit.
External auditors have been sanctioned and barred from the profession for backdating audit workpapers to deceive regulators into believing audit work was performed before the client’s annual report was published.
The process was illegal in many cases because documents were forged, the options were not properly accounted for, and the backdating was not clearly communicated to the company’s shareholders.Officers determined the 9-1-1 call was an accident but arrested him on the bench warrant.A police search revealed a baggie of methamphetamine in Kerr’s pocket.Every lawyer should be capable of distinguishing legitimate backdating from improper backdating.