Special Business Entity Reporting: One Plugged Hole is better than none

Abstract

This discussion includes an overview of special business entities and their status and outlines legitimate uses. It also illustrates what can and has happened, when individuals who lack integrity direct special business entities. Problems are identified that can arise when special business entities are not used as they were intended, namely, inaccurate financial reporting. The company in the illustration walked the line between legal and illegal, but was past the line of what was morally right, and in the shareholder’s best interest. The discussion concludes with an accounting solution for the special business entity problems.