Question

A company suffered loss from embezzlement and misappropriation. In relation to which entity can a deduction not be claimed for 'loss by theft' under the relevant provision.  

Select one:

a. agent

b. employee

c. solicitor

d. director

e. accountant

Answer 1

loss of embezzlement and misappropriation is a practice of simphoning funds or misusing the company's funds in unethical way for personal use or using compnay's sensitive information to make personal gains

loss from embezzlement and misappropriation is claimed for "loss by theft" under the provisions provided that the entity is agent, employee, legal advisor(solicitor), or accountant

but if the embezzlement is done by the director, the loss arising from such embezzlement and misappropriation, calls for a legal action in the name of the company against the director. such loss is not deductible as "loss from theft"

embezzlement is stealing the company's resurces from the company itself

since the employees, agent, solicitor and accountants are related to company with sensitive information but the director or board of directors are themselves responsible for company's corporate policy and are the top management constituents of the company, thus they dont claim deduction but call for legal action straight away

hence option d is right