Tax express audit

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The current legislation provides for rather severe penalties for providing false information during regular accounting reports on business activities. Any unaccounted-for transactions may entail liability for incorrectly recalculated taxes and fees for a particular period. Given the average business life cycle, there is virtually no statute of limitations in such cases. Therefore, every business owner, and even more so every director and chief accountant, is interested in periodically reviewing the tax returns submitted by their subordinates to the relevant authorities for a year or more. It is possible to carry out such an audit on your own, but this leads to certain inconveniences or even risks:

  • The need to remove the auditor (chief accountant or director) from the operational management of the company and its subordinates;
  • experience in regular reporting and knowledge of the latest requirements and rules for the calculation of taxes and fees is required, which means constant work with current periodicals and attending seminars on new developments in taxation and reporting;
  • In practice, it is difficult to calculate the amount of financial or other liability of the chief accountant in case of detection of his own mistakes or mistakes of his subordinates or failure to detect or incorrectly state inaccuracies in the reporting.

For this reason, third-party specialists are often engaged to conduct an express audit of tax returns for previous periods. This approach is more convenient and justified, as external auditors have no motivation to conceal mistakes, and they can work full-time and overtime to verify the information without having to neglect control over the business’s day-to-day operations.

The purpose and objectives of a tax express audit

Any audit’s purpose is to identify and correct previously made mistakes. When it comes to tax reporting audits, the main goal is to find inaccuracies in the data submitted to the tax authorities and ways to resolve such situations as quickly and painlessly as possible. It is well known that any error in the financial statements, whether it is deliberate concealment of information to avoid taxation or accidental inaccuracies due to inattentive accounting, is punishable by law and entails considerable financial liability. Fines and penalties can reach several million hryvnias depending on the situation, which often spells the end of the line for a company. However, Ukrainian legislation allows the possibility of submitting revised reports subject to payment of the necessary taxes and a small penalty. Thus, the purpose of a tax express audit is to check the submitted financial statements to identify possible inaccuracies in them, submit an updated report for a certain period, pay the necessary taxes, fees, and penalties and avoid liability before the law, as well as the burden of financial losses from full-scale fines for providing false information and tax evasion.

The objectives of the express audit are clearly in line with this goal, namely:

  1. Examination of the information submitted to the tax service on the business activities carried out during the period and their results (expenses, profits);
  2. Independent collection of data on the results of the company’s business activities for a certain period;
  3. Comparison of the conclusions of the tax reports prepared and timely submitted to the State Tax Service of Ukraine with the actual results;
  4. In case of errors or inaccuracies, search for effective methods to eliminate or correct them painlessly;
  5. Suppose the mistakes made will lead to the need to bear responsibility. In that case, it is possible to prepare recommendations on which method of responsibility to choose (full payment of fines or appealing against them in court).

After the tax express audit is completed, another, no less significant, stage of work usually begins. It involves correctly preparing data for revised reports, their timely submission and obtaining the review results. Suppose the director or owner of a company doubts whether their in-house accountants can prepare all the data correctly due to an audit with the involvement of external auditors. In that case, third-party consultants can be engaged to do this work. “The Western Consulting Group offers such a service, as well as defending the client’s interests in court if, under any circumstances, such a need arises.

Basic principles of express audit and their importance for transparent cooperation between the auditor and the client

The main advantage of the work of a highly qualified external auditor is the client’s absolute confidence that the work will be performed properly. This is achieved by strict adherence to the basic principles of tax express audit. These include, in particular, the following:

  • preliminary planning of the express audit and coordination of the timing and methods of verification of reporting information;
  • specifying methods for assessing errors or inaccuracies;
  • studying the mechanisms of reporting and ongoing verification of data required for submission to the tax authorities, analyzing their effectiveness;
  • in-depth and detailed analysis of the collected data on the results of the company’s business activities;
  • analysis of possible risks that may result from the submission of inaccurate information during tax reporting in previous periods;
  • justification of the decision based on the results of the express audit and development of effective recommendations to avoid consequences (financial, administrative and other);
  • work based on the cornerstone principles of external audit: honesty, high professional ethics, objectivity and absolute responsibility for the results of the tax express audit;
  • informing the customer in full without concealing any facts and attempts to make permissible and desirable changes and clarifications without his knowledge;
  • unconditional confidentiality and guarantee of secrecy of any data revealed in the course of the tax express audit;
  • high quality of information – the customer should receive not only a full description of the state of tax reporting in the company with details but also a list of possible risks and a concise, effective and useful action plan in a particular situation.

Each express auditor involved must be a professional of a serious level and have many years of experience in such audits, as well as an effective portfolio of recommendations to minimize the consequences for the client company of incorrectly submitted data from previous reporting periods. Sometimes, one professional cannot promptly verify all the necessary information and develop an action plan for the company with unconditional compliance with all the above principles of tax express audit. Therefore, cooperation with consulting companies is considered the most effective and justified, where several specialists simultaneously perform tax express audit services for the client company. This allows you to:

  • significantly reduce the time of the audit (since the very concept of express audit implies that data analysis and evaluation is carried out quickly);
  • obtain an impartial assessment from several highly professional express auditors, which is concisely and specifically set out in the company’s tax express audit report;
  • have a guarantee of timely completion of the procedure under any circumstances.

The Western Consulting Group provides tax express audit services based on unconditional compliance with this procedure’s principles. It helps to identify weaknesses in the company’s accounting and avoid possible financial and administrative penalties for its management.

Results of the tax express audit and its importance for the full and legal development of business in Ukraine

Any audit is aimed at finding inaccuracies, errors, deviations, and possible savings. Traditionally, the result of a tax express audit is the identification of discrepancies between the actual data on the company’s business activities in the market and those submitted to the fiscal authorities. This usually means that certain data was not included in the report promptly. In most situations, this is due to inattention and lack of experience on the part of the accountant, and very rarely are such shortcomings intentional. However, Ukrainian law provides for serious liability for such offenses. A timely and efficient tax express audit helps to avoid possible penalties and save the company’s funds for further investment in business development instead of paying fines, penalties, etc. This procedure guarantees the owners and directors of the company security, peace of mind, and confidence in the future. It allows the business to grow rapidly within the law, regardless of its specifics and peculiarities.

Tax express audit is an effective tool for ongoing audits of the company’s accounting and financial statements

High-quality accounting in a company is the key to properly managing financial flows. As for tax accounting, its reliability and efficiency guarantee the legitimacy of the business and open up many opportunities for the company’s management and founders. That is why periodic ongoing audits, including tax express audits, help avoid potential liability risks for income concealment and tax minimization. Growing and developing your business legally is the easiest way to achieve prosperity and profit growth for your company.

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