In 19^th century China, Ching Shih (Also known as Zheng Yi) is working aboard a floating brothel off the coast of Canton, now modern-day Guangzhou and British Hong Kong. It is here around circa 1800 she meets Cheng I, a captain of the pirate flotilla, The Red Flag Fleet, operating in the South China Sea. He was a fearsome pirate who pillaged and raided the coasts of China and Canton and took Ching Shih for his wife.

Though Cheng has reputation as a swash buckling pirate, it would be Ching Shih who’s legacy would far exceed that of her husband. Following his untimely early death in 1801, Ching Shih succeeded his Red Flag Fleet. Her crew grew from just 300 ships in her first year as captain to 1,800 ships and an estimated 80,000 pirates by her third year. For comparison, Blackbeard commanded only 4 ships with 300 pirates. Ching Shih amassed the largest navy in the world in just 3 years, and a pirate navy at that!

You may find hard to believe, but one thing pirates need are accountants – which are exactly who Ching Shih introduced to her pirate utopia. A shrewd businesswoman herself, she introduced taxes and laws to her fleets. All loot had to be registered and evaluated before being distributed among the fleet, and if you didn’t agree with her financial policies, you were free to hang up your sword and leave – just so long as you left your head behind.

The fleet grew under her command with expanding reserves of loot, and an organised system of business and trade. Whichever ship captured the loot were entitled to retain 20% of its value, while the remaining 80% was placed into the fleet’s collective fund. Her raids at the height their success expanded from the South China Sea to as far as the Bay of Bengal.

In 1809, the Chinese, British, and Portuguese had all suffered humiliating defeats by Shih. Desperate for an end to the pirates reign, they offered Shih and her pirate fleet with amnesty. Her power was slipping away by this point, so she accepted – but not without first negotiating to maintain the riches and power she earned as a pirate lord; having the collective of treasures distributed fairly among what remained of her (excessive) fleet; the prisoners freed from the gaols using the collective fund as bail money; and receiving her own property in Canton.

Shih eventually settled in Canton and opened her own gambling house, before passing away peacefully in 1844 aged 69. It is estimated that Shih’s estimated pirate loot would be worth $1.7 million dollars in today’s money.

You may have read up until this point and are wondering why an article promising to outline the merits for good accounting in small businesses started with a story about a pirate? Let me rephrase the story into simple, business terms –

• Ching Shih, though inherited her pirate fleet initially upon the death of Cheng I, essentially started out as a small business.
• Her late husband, Cheng I, though a powerful and ruthless CEO (captain), operated his small business with a staff (pirates) of only 300. In contrast, by the end of Ching Shih’s third year as CEO of the Red Flag Fleet, had 1,800 shops (ships), and 80,000 staff.
• While Cheng I was in power, the estimated worth of his wares were paltry in comparison to Ching Shih’s fortune amass of $1.7million.
• Ching Shih’s appointing of accountants for her small business helped it grow into a profitable large business which benefited her staff through taxation and profit registration (loot). Payroll was distributed fairly among her shops and staff, which lead to fewer staff quitting (deserting), and no recorded staff strikes (mutiny).
• Ching Shih’s small business operated originally only along the South China coast and Hong Kong. Her business expanded during her short time as a pirate CEO to international trade and business agreements.
• Ching Shih’s tactical accounting strategies lead to her decision to portion away 80% of the profits made to a collective fund. These saving allowed her to negotiate lucrative trades with foreign investors, gained valued interest in the years it remained in the fund, and eventually was paid to her staff at the end of her career at triple the value when it was originally stolen acquired. This rainy-day fund saved Shih, her staff, and her business on numerous occasions.

In short, Ching Shih was a 19^th century entrepreneur who was beyond her time in understanding the importance of having accountants on board (pun intended). Had she attempted to keep the power and decisions for handling The Red Flag Fleets finances alone, the fleet would have disbanded and mutinied early on, and her legacy would be lost to the ages.

Often when a small business is starting out, financial tasks such as payroll, tax, and business activity statements fall squarely on the owner’s shoulders. It can be tempting to maintain that control once the money starts to flow, and few business owners, like pirates, love giving up control. If you’re anything like Shih, you know that having a professional accountant by your side is a crucial element to your business’s success.

You don’t have to be a swash buckling pirate to get accounting advice for your small business. Auditax Accountants offer a wide range of professional, and affordable, accounting services to businesses across Australia. Speak to one of our business accounts specialists.

The stories are always similar. Your friends mother, who’s either elderly, or doesn’t speak English as her first language, get’s a call around 7pm. The caller advises they are from the Australian Tax Office (ATO), and that she owes a large amount of tax debt.

They are very demanding and hostile. They say they will call the police if she doesn’t pay her debts now. She is worried – she doesn’t want to go prison. She asks how she can pay her debts back. They advise her she can pay it off using gift cards. She drives to the nearest supermarket and purchases several gift cards – JB Hi-Fi, Google Play, even cards for Woolworths and Coles, amounting to the $4000 she owed.

She then receives text messages – The ATO wants photos of the gift cards, showing the validity codes. She sends them and thinks it’s finally over.

The next day they call her again – They request more money, and more cards. She realizes she is being scammed.

It’s probably happened to someone you know. They contact you or someone you love via email, or phone or mail demanding money, and threaten you if you do not meet their request. When the demands are met, the consequences are devastating.

Types of Tax Scams

Now that tax time is here, criminals may attempt to access individuals’ and businesses’ money and information. It’s so prevalent during tax time, in fact, that in 2021, the ATO received over 50,000 reports of scams, with $800,000 reportedly lost!

Here are three main types of scams that involve criminals impersonating the ATO.

Tax refund scams

Scammers contact you, usually via text, or e-mail, claiming that you’re owed a tax refund. They require you to click a link that takes you to a website that mirrors MyGov or the ATO. From here, you are advised to input your personal details, and then pay a processing fee to release your funds.

The scammer uses this information to siphon funds from the bank account and personal information provided on the fake page. They further use your ‘processing fee’ as a bargain point to either harass you to pay any more ‘hidden fees.’ They also threaten you against calling the police by arguing the processing fee was consensual upon you realizing this was a scam.

In worst case scenarios, the scammer will use your personal information for identity theft.

Tax owed scams

These scammers contact you pretending to be the ATO and claim that you have a tax debt. They then demand that you pay the debt immediately to avoid being arrested. They may ask you to pay by credit card, money transfer, or ask you to pay it back using gift cards.

These scammers are often demanding and very hostile. While the ATO does from time-to-time contact people who are owing debt, they will never –

• Call you with a pre-recorded message
• Threaten you with immediate arrest or use profanity
• Demand payment through gift cards or to personal bank accounts
• Insist you stay on the line until a payment is made

• Call with Caller ID.

It can sometimes be useful to familiarize yourself with what a fake call from the ATO will sounds like. You will find many recordings of them on YouTube, such as this one from 2018.

Tax File Number (TFN) and Australian Business Number (ABN) scams

These scams are often found on social media, promising to set up a TFN and ABN for a fee.  Instead, they steal your money and personal information.

Applying for a TFN or setting up an ABN is free. If you are applying through a tax agent, however, you may be charged a fee. You should always check if they are registered with the Tax Practitioners Board.

How To Sniff a Scammer

Don’t get caught up in a scam. Below are some tips to stay safe and wary of scammers around tax time.

Email or Text Scams

If you receive an email or text message from a number claiming to be the ATO, and they ask for personal or financial information – do not respond. Additionally, avoid clicking any links, or downloading attachments from suspicious text messages.

Phone Scams

If you receive an unexpected call from someone claiming they’re from the ATO, threatening you with arrest, asking for money to pay back a refund or debt, or asking for personal information – hang up. It worth noting also that the ATO will call from a private number – not from Caller ID.

Ask the ATO

If you’re concerned about the authenticity of a call or text from claiming the ATO, hang up and call the ATO on 1800 008 540. You will also find detailed information about various scams on their website.

Remember, that the ATO will never –

• Ask you to pay your debt into a non-ATO bank account, via gift cards, or with cryptocurrencies
• Threaten you
• Ask you to pay a fee in order to receive a refund
• Ask you for personal information via email or SMS
• Ask you to download, or open attachments, from the Internet

They Say That Money Talks – So What Is Yours Saying?

Most of us know that our superfunds invest into many industries and shares – but your superfund investments are likely funding activities that are not sustainable and may be contrary to your ethics.

If investing is something that you are interested in, but you don’t want your money to support industries or practices you don’t agree with, then ethical investing may be what you’re looking for.

What Is Ethical Investing?

Ethical investing refers to using one’s own ethical principles as their primary filter for where they invest their money. This obviously comes down to the individual’s perspective, however, it can generally be summed up as thinking with your moral compass, rather than what gives you the best returns.

Common denominators are shared in ethical investing. For example, some funds align with an investor’s personal beliefs towards the environment, such as those ensuring tree replanting, or clean energy. Others, meanwhile, may align them with religious, or political precepts. For example, some investors may choose to eliminate specific industries, such as sin stocks, which are companies that are involved with traditionally unethical practices, such as gambling, alcohol, or firearms.

So, how can you make money while making the world a better place?

History of Ethical Investing

Ethical investing has its roots originally in religion. In Biblical times, ethical investing was mandated by Judaism. Tzedek (trans: justice and equality) called for justice to correct the harm that humans cause. To have money, or own property, carried responsibility to prevent immediate or potential harm.

Later, in their 1758 Yearly Meeting, The Quakers decreed those members participating in the slave trade – the buying or selling of humans – would be ex-communicated. They further prohibited members of the clergy from spending money on the slave trade or leasing their ships for use in the transatlantic slave trade.

In 1760, John Wesley, one of the original founders of Methodism, preached the importance of refraining from investing in industries that harm human beings, such as chemical plants and mining. He outlined in one of his sermons one the basic tenets of ethical investing that we “ought not to gain money at the expense of life or by losing our souls.”

By the 20^th century, the developments in ethical investing mirrored the political climate and social trends of the time. For example, ethical investors in the late 1960’s and early 1970’s began focusing on organizations that supported unionist movements, and further shunned companies that supported or profited from the Vietnam War. The 1960’s also saw a rise in Islamic banking, which shuns investments in alcohol, gambling, and pork, alongside prohibiting interest.

The 1990’s saw ethical investments narrowing down on environmental issues. Ethical investors moved away from organisations that profit off coal, fossil fuels and deforestation and placed their money into companies that supported clean and sustainable energy. Today, ethical investing continues to primarily focus on impacts on the environment and society, sometimes referred to as green investing.

Benefits of Ethical Investing

Thanks to impact portfolios offered by a plethora of sustainably mutual funds, ethical investing is easier than ever. Not only that, but a study by AMP found that the median ethical investment manager has outperformed the S&P/ASX 200 Index over the span of five years.

There is evidence to suggest that ethical investments may offer lower levels of market risk than traditional investments, even in volatile markets such as the COVID-19 pandemic, or the outbreak of the Ukraine/Russian war. According to Morningstar data, 24 out of 26 ESG index funds outperformed comparable conventional funds during the first quarter of 2020.

If you need more reasons to switch your investments to an ethical fund, then consider this – You can live in alignment with your values. By investing in an ethical way that is aligned with your values and beliefs, you’ll be making money and using your money to improve society. You can sleep better at night knowing this.

How to Build an Ethical Investment Portfolio

Building an ethical portfolio is very simple. Here’s how to start investing ethically:

1. Decide how involved you want to be

When it comes to building an ethical portfolio, you can either choose to handpick specific investments and monitoring them over time, or you can get some help.

If you want to build your own portfolio, you can open a brokerage account, and use screening tools to find the right funds for your portfolio. If you don’t already have a brokerage account, here’s how to open one.

If you want assistance building a portfolio, that’s fine too! Many individuals go through a robo-advisors. Robo-advisors use algorithms to build and manage investment portfolios based on your goals, and your ethical preferences. They are also much cheaper to use compared to traditional advisors. Click here to view some robo-advisors that offer socially responsible portfolios.

2. Figure out what’s ethical to you

Before you start splurging, take some time to outline what ethical investing means to you. Does a construction company still count as ethical to you if it includes reforestation initiatives for every tree it cuts down? Knowing what industries, you want to support and which you want to avoid will make it easier to include or exclude investments.

3. Build your portfolio

Once your brokerage account is set up and you have figured out your goals, you can start building a portfolio. There are two simple ways to add ethical investments to your portfolio:

• Buy ethical stocks that you align with your values. If you’re new to this, you can check out Nerdwallet’s simple how to guide for buying stocks.
• Buy through Exchange Traded Funds (ETFs) – Click here to read more about how to do this here.

As Always, Check The Product Disclosure Statement (PDS) Before You Invest

The PDS that comes with all investing portfolios isn’t just there for show. It contains a lot of valuable information that you’ll need to know about your investments, and about your own portfolio, including:

• what index, sector or asset the ETF or stocks returns aims to replicate
• the fees and costs of investing
• the risks over the short, median and long term
• how to make a dispute or exit from your plan.

Thinking of investing ethically with your SMSF, or as a side hustle? It’s always wise to seek financial advice first. Auditax Accountants can help you make the best choice for your SMSF or goals. Call us on (08) 9358 5599 and ask to speak with one of our specialists.

Most of us have lost a bit of money at some point. A coin at the laundromat. $20 that fell from your pocket. It’s inconvenient, sure, but not necessarily life altering.

However, imagine losing 1.5 billion dollars. This is no Elon Musk losing a few dollars – this is how much Australian’s have lost, collectively. According to the Australian Securities and Investments Commission (ASIC), Australian’s have around $1.5 billion in lost shares, bank accounts, life insurances, trust money, wages, rent, and superannuation waiting to be claimed.

That’s a lot of lost treasure

Many Australian organizations and government agencies will attempt to return lost money to their rightful owners, but have been unsuccessful because the owners –

• Have moved homes
• Have changed their names
• Misplaced a cheque
• Have just…forgotten it’s there.

Seriously, it happens more often than you think.

How do you find – and claim – any lost money in your name?

This is your official notice to head to the Moneysmart website, the unsung heroes for finding lost money, and use its unclaimed money search tool. The service is free and takes less than two minutes to do.

Alternatively, you can also use the Unclaimed Monies tool through your relevant state or territories Treasury Departments. Click on your state or territory to search.

• Western Australia
• Australian Capital Territory
• New South Wales
• Northern Territory
• Queensland
• South Australia
• Tasmania
• Victoria

Why does the Government hold on to unclaimed money?

The short answer – because your accounts have been inactive, and money can’t simply just disappear.

The long answer – After seven years, the remaining balances of inactive bank accounts, super funds, shares, and insurance policies are transferred to the Commonwealth of Australia Consolidated Revenue Fund. There, it collects interest until it is claimed.

Why does it hold onto all this money? Because it’s someone’s lost treasure, is why. Would you like your money to disappear into thin air, or sold off elsewhere? Or would you prefer it to be held onto safely – and still earn interest?

It’s an easy choice.

It takes less than two minutes to check if any of this lost and unclaimed money is in your name, and it’s completely free to do so. Take a look now, and don’t forget to encourage your friends and family to check as well.

Didn’t find any lost money?

Don’t fret! You can search for other types of unclaimed money on other government websites:

Australian Taxation Office – You can search for any lost or unclaimed Superannuation in just a few minutes.

State government – Search your state government’s treasury websites for deceased estates, lost shares, salaries or wages. They have been linked above.

Services Australia –If you have changed bank accounts, then you may have lost some benefits along the way. Likewise, your Medicare benefits.    

Want to start a new business with that unclaimed cash of yours? Auditax Accountants can help you set up your business, and ensure your business is off to the best possible start. Call us today on (08) 9358 5599 and ask to speak with one of our business specialists.