Tax audit . It is defined as the rational verification of accounting records and documentation, in order to determine the accuracy and completeness of accounting . The Fiscal Audit consists of the selective investigation of the balance sheet accounts, the income statements, the documentation, registration and operations carried out by a company, aimed at verifying that the bases affected by taxes have been determined in accordance with technical standards. that you regulate the accounting and complying with the legal provisions contained in the Commercial Code, Organic Tax Code, and other applicable tax laws.
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- 1 Objective and purposes
- 2 Tax audit techniques
- 3 Basic rules for the execution of tax audits
- 4 Sources
Objective and purposes
The audit has traditionally been conceptualized as a technique aimed at providing an opinion about the reasonableness with which the financial statements represent the economic and financial situation of the company.
The objective of the Tax Audit is the evaluation of compliance with tax obligations, made up of the main and the accessory ones. Among the primary objectives are the following:
For an Independent Audit, the objective must be directed towards a specific situation of the company’s financial position and the result of its operations through a critical and systematic examination of its financial statements and records.
In the case of an internal audit, the object is the detection and prevention of fraud, within certain areas of an organization, which is carried out by the company’s dependent personnel.
This could be done through a detailed review of operations or verifying their accuracy through the application of the internal control system.
Tax audit techniques
The techniques of a Tax Audit are defined as the routine tasks, steps or methods necessary to obtain evidence material regarding the results of a balance or record.
The realization of these techniques allow to verify the authenticity and correct accounting of the operations and the correct compliance with the rules and procedures which will be applied according to the pertinence of the case until achieving the auditor’s conviction regarding a certain fact or circumstance that is examined. .
Depending on the type of company, the auditor has a series of auditing techniques that are mentioned below:
Action by which the auditor studies and warns, in an appreciative way, the facts or events and circumstances in which they take place and in the different functions or management of the audited company.
Research carried out by the auditor on certain points based on questions he asks of people in the audited company .
This technique allows an opinion to be formed regarding the company, fact or matter determined, however, the conclusions or judgments necessarily require a check or evidence that sufficiently supports it, which will be achieved through the application of other techniques as appropriate.
Some examples include:
- Existence of salesplans and manuals
• Cost systems
• Purchase and sale policy
• Organization of the company
• Returns and losses
It is the action tending to make sure of the occurrence or not of a fact or matter, by obtaining a pronouncement from third parties outside the company, who know the nature of the fact or circumstance that allows the auditor to form a true and stable judgment .
It is the critical study of certain facts that allow us to conclude that the information subject to this technique is inside or outside the normal.
It consists of separating elements and grouping them according to their nature or origin in such a way that a conceptual judgment on the balance or movement of a record or account is formed from the examination practiced by the auditor.
It is the verification of the arithmetic correction of the calculations made by the audited company, through the recalculation performed by the auditor, among some examples we have:
- Multiplications of units by unit prices in stock (Inventory Books)
• Sums of the columns of books or remuneration.
• Tax rates on taxable base in declarations.
Using this technique, the auditor will verify that the accounting cycle has been met in accordance with generally accepted accounting standards.