Mistake to You Must Avoid in Auditing

Auditing is basically a process which involves the evaluation of a business, product, enterprise, taxes, persons, or enterprise. Auditing in its strict sense involves the appraisal of internal and external business factors to determine the finances and viability of a business or enterprise. It is also helpful to ensure that an enterprise abide by the government and system policies. Also, it is through auditing that company officers or head learns of any discrepancy and suspicious transactions that can bring the business under. Auditing covers a vast process. It involves accounting, quality audit, management audit, operations audit, and a lot more. Auditing is performed by an auditor or auditing firm. But note that even auditing professionals can make mistakes in auditing.

Common Auditing Mistakes and How to Avert Them
Auditing mistakes is commonly made in tax returns. Just when you thought that work is done by the filing of Tax Return, you will suddenly receive an IRS letter. It commonly happens for tax returns to disclose erroneous assessments and tax liabilities. If this happens, make sure to get a grasp of the content of the IRS letter or notice. In there, you will find how many days you have left to amend or adjust the erroneous contents of your tax returns, as well as the additional tax penalties which may be imposed.

Even professional auditors may make mistakes in computation of taxes or corporate income and liabilities. If the erroneous audit is made by a hired professional, it would be necessary to consult him about the error and have the audit adjusted. Alternatively, you may be forced to hire the services of another auditor or auditing firm. This means an additional expense on your part, and a great inconvenience.  To avoid such a fuss, it is best to do the auditing yourself, if you know the drill. Of all people, you are most familiar about your income, liabilities, assets, or business. Hence, it will be easier to make truthful rather than erroneous tax returns or audit. It is also less time consuming and costly.

Another auditing mistake is the failure to attach or manifest supporting documents. These lapses are often the result of poor record keeping technique. As a remedy therefore, make sure to organize your files first. Make sure to arrange them in a way that is will be easy to generate a specific document in a short while. In case a supporting document is needed for the audit, make sure to attach a copy of the original, or send it.

In audit matters involving payment, like taxes, paying up immediately is not the proper remedy. Paying up in response to the IRS letter or notice is not the proper cure. Note that there could be a wrongful assessment of tax liability. Hence, paying up will not spare you from additional tax liability upon correction of the tax return, as well as tax penalties. As such, instead of simply paying up, review the tax return and see if there are loose ends and erroneous assessments. For all you know, there was an excessive assessment and you are actually entitled to pay less. Also, before paying up, try to bargain to lower the amount of tax to be paid.

In hiring an auditing professional, make sure to provide only the needed information. When inquired upon, simply make brief statements. Elaborating on certain matters may only cause suspicion and cause a more extensive auditing.

Author Bio:
The team at Mitchell Charles worth will provide you best solution that reduces the constraints, jargon and bureaucracy holding your business back. Mitchell Charles worth is large portfolio of services based on partner-led, personal relationships which ultimately will give you peace of mind and greater profitability. Because of this we can be much more than ‘just’ your accountants in Chester.
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