The auditor must plan the review work in order to establish strategies that allow him to achieve the objectives effectively; to do so, he must have prior knowledge of the entity, its field of activity, the business explored, the organization, the accounting system employed, the operational characteristics, the nature of the assets, liabilities, revenues and expenses of the entity; finally, it must know in advance all possible variables, associating them with the relevant tax legislation, in order to define the extent of the tax audit work and the correct tax framework of the company’s activity. This is extremely important, as an incorrect framework can lead to tax contingencies.
An example of this is the company included in the calculation of Corporate Income Tax (IRPJ) and Social Contribution on Net Income (CSLL), mandatorily, by the legislation on the Real Profit regime (percentage on the tax profit calculated initially through the balance sheet and income statement), and that is calculating these taxes in the form of Presumed Profit (percentage on earned income), without having ever recorded the financial statements.
The auditor of the tax and tax area must request, before starting the review work, the following documents:
- ❐ Copy of the balance sheet, income statement for the year, statement of changes in equity and analytical balance sheet for the year under review.
- ❐ Memories of calculations and proof of payment of Income Tax and Social Contribution (in the case of direct taxes) and IPI, ICMS, ISS, PIS and Cofins (in the case of indirect taxes) during the year under review .
- ❐ Copy of the file containing the forms and attachments to be reviewed, duly completed.
- ❐ Copy of the form and attachments presented in the previous financial year.
- ❐ ProfitReal Calculation Book, with bookkeeping updated up to the previous financial year, as well as the other tax books for calculating taxes, such as IPI, ICMS and ISS.
- ❐ Draft of the bookkeeping that should be done in part “A” of Lalur for the financial year under review and in part “B” of the adjustments still open.
- ❐ Memories of calculations of the amounts collected, showing the advances collected through withholding tax, whose income is computed in the determination of the Real Profit.
- ❐ Referenced trial balance or working papers, if any, related to filling out forms and attachments.
- ❐ Statement of accounting changes, identifying, in the Daily Book, the entries of items that should be added or excluded from the Net Profit for the Year in determining the Real Profit and the CSLL calculation base.
- ❐ Obtaining, from company representatives, all the details about the nature of the products or services sold, specific tax benefits and other information pertinent to sales, comparing them with those presented in the Corporate Income Tax Declaration (DIPJ) and with those contained in the Income Statement for the Year.
- ❐ Verification that purchases, inventories and appropriations to product costs are recorded in the accounts at the net amounts of ICMS and IPI (taxes considered recoverable).