Sales Tax Audit: Through Finance Act, 2018 Sales Tax Audit under section 25 of the Sales Tax Act, 1990 to be conducted only once in every three (3) years.
What is a Sales Tax Auditor
Sales Tax Auditors are primarily responsible for examining the accounting records of companies engaged in business within the Town to determine tax liability.
Types of Tax Audit
The Four Types of Tax Audits
1) Correspondence Audit. Correspondence audits are the most common type of IRS audits.
2) Office Audit. The second type of audit is an Office Audit.
3) Field Audit. A field audit is the most comprehensive and detailed IRS audit.
4) Taxpayer Compliance Measurement Program (TCMP) Audit.
How Often do you get Audited
For “substantial errors,” the IRS maintains it can go back six years and recommends you keep most records at least that long. The experts agree: If an audit is going to happen, it will occur in the latter half of the three-year time frame. “Audits generally always happen two years after you file,” Zinman said.
Famous Types of Audits
There are a number of types of audits that can be conducted, including the following:
- Compliance audit.
- Construction audit.
- Financial audit.
- Information systems audit.
- Investigative audit.
- Operational audit.
- Tax audit.
Audit Process Step by Step
There are six specific steps in the audit process that should be followed to ensure a successful audit.
- Requesting Financial Documents.
- Preparing an Audit Plan.
- Scheduling an Open Meeting.
- Conducting Onsite Fieldwork.
- Drafting a Report.
- Setting Up a Closing Meeting.
What is Audit Checklist
An audit checklist should focus on three traditional audit segments: management, finance and operations. Sketch out the main subject headings for the audit checklist to help paint a picture of the necessary pieces of an audit. Subject headings should include “Management,” “Finance” and “Operations.”
Who is Eligible for Tax Audit
Under section 44AB, a compulsory tax audit is required to be completed by a Chartered Accountant if a business has total sales turnover or over Rs.1 crore. In case of a profession, if the profession has total gross receipts of more than Rs.50 lakhs, then tax audit by a Chartered Accountant is mandatory.