Audit Service Information
What is an Audit?
The general definition of an audit is an evaluation of a person, organization, system, process, enterprise, project or product. The term most commonly refers to audits in accounting. Audits are performed to ascertain the validity and reliability of information; also to provide an assessment of a system’s internal control. The goal of an audit is to express an opinion on the person / organization / system (etc.) in question, under evaluation based on work done on a test basis. Due to practical constraints, an audit seeks to provide only reasonable assurance that the statements are free from material error. Hence, statistical sampling is often adopted in audits. In the case of financial audits, a set of financial statements are said to be true and fair when they are free of material misstatements – a concept influenced by both quantitative (numerical) and qualitative factors.
Auditing is a vital part of accounting. Traditionally, audits were mainly associated with gaining information about financial systems and the financial records of a company or a business. However, recent auditing has begun to include non-financial subject areas, such as safety, security, information systems performance, and environmental concerns. With nonprofit organizations and government agencies, there has been an increasing need for performance audits, examining their success in satisfying mission objectives. As a result, there are now audit professionals who specialize in security audits, information systems audits, and environmental audits.
What is sales tax audit?
A sales tax audit is the examination of a company’s financial documents by a U.S. state’s tax agency to verify if they have collected the correct amount of sales tax from their customers. The purpose of a sales tax audit is to examine the business records of a vendor in order to determine if the appropriate amounts of sales tax revenue have been collected from the customer by the seller and remitted to the vendor’s state. The records reviewed during an audit often include: Sales Tax Returns, Worksheets and Canceled Checks, Federal Income Tax Returns, Corporation Tax Returns, General Ledger, General Journal and Closing Entries, Sales Invoices, Exemption Documents Supporting Non-taxable Sales, Charts of Accounts, Fixed Asset Purchases/Sales Invoices, Expense Purchases, Merchandise Purchases, Bank Statements, Canceled Checks and Deposit Slips, Cash Receipts Journal and/or Purchase Journal, Cash Disbursement Journal and/or Purchase Journal, The Corporate Book (Minutes, Board of Directors, Articles of Incorporation),Depreciation Schedules.
Why did I receive IRS Audit Letter?
Facing an IRS audit is highly feared by most taxpayers. Receiving an audit letter from the IRS is not anyone’s dream. Nobody wants to receive the dreaded IRS Audit Letter. Whether you are innocent or guilty, it still strikes fear in people because they have no idea what to expect. IRS is a government agency.
It is best, of course, to get professional assistance when dealing with this type of problem. Don’t meet with the IRS alone. After all, you are going into this situation cold and have no idea what to say or what to do. If you do have a certified public accountant assisting you, it will communicate to the IRS that you are taking it seriously, and that they will have to be at their very best to try and prove the case against you.
Keep in mind, the chance is good that your number just happened to be picked. IRS does do random selection of tax returns to audit. If you have been selected for an IRS audit, do not stress – be patient and call a certified public accountant who can help you.