E-Audits - Computer assisted verification methodologies
In the course of conducting reviews or audits, The Australian Tax Office (ATO) may use E-audits by assessing the integrity and governance controls of businesses and IT systems; to ensure that the correct amount of tax is paid.
An E-audit involves obtaining electronic data to compile, verify and analyse accounting information and record keeping of businesses selected for Audit.
If a taxpayer is selected for a client engagement letter, an audit or a review; and they maintain electronic records, then the ATO may consider the use of an E-audit.
The benefits include –
· Cost savings – all information is provided electronically, thus minimizing requests for paper copies and reports
· Minimal disruption to regular business activities; because the ATO may not need to spend any time at the business premises
· The ATO may also provide a risk assessment of the business IT systems as part of the process
Under formal access powers, the ATO is permitted full and free access to documents required for the purposes of the Acts they administer. “Documents” include electronically stored information.
If a business is selected for audit, the ATO will seek access to information through a cooperative approach, and will consult with the taxpayer on records required. This generally results in the ATO scheduling a meeting with the taxpayer; such meeting can include the tax advisor/accountant and information technology specialists.
The ATO systems include specialized software to verify that the electronic information provided is accurate and complete.
(We remind our clients that we offer “Audit Shield” accountancy insurance, to cover our professional fees associated with audit activity.)
Dereen Wallace, Partner
MBA BUSINESS SOLUTIONS
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