Audits
Audits are
part of most businesses, whether they are internal audits or audits by Tax
officials. An audit can seem like a
daunting prospect, but if you follow some simple rules you can get the most out
of the audits, and avoid problems.
Here are some tips to help make an audit
go smoothly:
Before an audit
You
need to be prepared for an audit,
because they can come at any time. Make sure all your records are in order, and
maintain detailed bookkeeping. If
you are prepared for an audit, then
you are less likely to be surprised or have problems. Here are some things you
should do before an audit:
Do your research
Research
tax legal issues before an audit
occurs. If you are still unclear about the tax law or how to present your
documents to an auditor, consult a
tax professional. It pays to know the law before you have your audit.
Know your rights
Knowing
what rights you have before an audit
occurs can help you if anything goes wrong with the audit. If you believe the auditor
is treating you badly, or it is not going well, then ask for a recess or speak
to the auditor’s manager. If you
know your rights then you will be in a stronger position to deal with any
problems that might occur.
Develop an audit plan
Develop
a plan so you know exactly what you will do in the audit, and how you will deal with any possible problems. The key to
a successful audit is to be fully
prepared for any eventuality.
During an audit
If you
are going to be subject to an audit,
then there are a number of things you should do whilst the audit occurs. If you follow these guidelines then things will run
more smoothly.
Don’t host an audit
If you
are going to be audited, try and
avoid the audit occurring at your
home or business. Instead, go to the offices to conduct the audit. This way the scope of the audit will be maintained, and other
unexpected issues are less likely to arise.
Don’t get emotional
If the audit is going badly, or there are
problems, try and be professional, and do not get angry or upset. Emotional
responses will not help your situation, so it is best to remain calm and work
through the problem.
Be honest
The best
way to avoid problems in an audit is
to be honest. If you try and hide things, you could end up with many more
problems. Even if it means you will have to pay more tax, always be open. Your bookkeeping should be detailed and
transparent, and any other items of information you think are relevant should
be kept as well.
After the audit
Now
that the audit is finished, things
have hopefully gone well for you. However, if problems have arisen then you
need to address them.
Comply
If you
need to pay extra tax or other problems have occurred, do all you can to comply
with the audit results as quickly as
possible. Failure to comply can lead to many more problems, and could put you
in serious legal trouble.
Appeal
If you
believe that the results are wrong or you are unable to comply, then you can
appeal the results. Ask the auditor
to see if there is a way you can reach a compromise. If this is impossible you
can take the matter further with the tax office through the courts, although
this should be done only as a last resort.
Don’t worry
If
you are going to be subject to an audit,
remain calm. Being audited does not
always mean you have done something wrong. It is a way to make sure everything
is in order, and clear up any points that are unclear. If you have nothing to
hide, and have done your research, then the audit should go fairly smoothly.