Tax Audit Processes

The Audit Plan should contain any or all of the following issues depending on
the type of audit to be performed:
1. Taxpayer’s background information

2. Type of taxes applicable
3. Synopsis of tax compliance status
4. Type of audit to be performed
5. Scope and extent of audit coverage including tax years to be covered.
6. Open tax issues, if any
7. Tax Audit Work Programme
8. The Audit Team
9. Time estimate and cost implications
10. Any other matter relevant to the audit
11. Audit Files

All audit workpapers generated during the conduct of a tax audit must be
properly organised and filed. The files should contain the documents and
workpapers generated during the audit. These may include:
1. Synopsis of audit instructions.
2. Basic or background information about the taxpayer.
3. Analytical review of the taxpayer’s returns.
4. Audit plans, including the Audit Planning Memorandum.
5. Scope and extent of audit coverage, including the audit programme.
6. Minutes of meetings with all parties concerned.
7. Tax Status Report, including the related tax computations and financial
statements.
8. Financial statements, tax returns and related computations.
9. Audit working papers, forms and templates which summarise details of

work done, findings, conclusions and additional assessments raised.
10. Copies of supporting documents and correspondences.

11. Interim Audit Report.
12. Final Audit Report.
13. Recommendations with regards to the tax administrative processes which

were forwarded to TAPPD.
14. Recommendations with regards to amendments to tax legislation, which

were forwarded to TAPPD and subsequently to TPD and the Federal
Minister of Finance.
15. Case closure reports and documents
Tax Audit vs Tax Investigation

IRAS tax investigation is usually carried out on a taxpayer who is suspected of tax evasion.
The aim of the tax investigation is to gather sufficient evidence on the tax evasion scheme
and then prosecute the tax evaders in court to send a strong deterrent message to the public.
In order to preserve the documentary evidence for prosecution, a surprise visit is necessary
for tax investigation cases.
On the other hand, IRAS tax audit is an inspection of the tax filing with an objective of
rectifying errors and educating taxpayers. A taxpayer usually receives an advanced
notification from the IRAS tax auditor prior to the auditor’s visit. Such visit by auditor is
called a field audit. IRAS audit can also be in the form of desk audit where query letters are
sent and the tax payer is required to bring the necessary documents to the IRAS for
inspection. Tax Audit Process is less complicated than the Tax Investigation Process.
Tax Audit Process

Once you receive the notification of a tax audit either via a letter or a telephone call from
IRAS, you would be informed on the date and time the IRAS auditors would visit your
premises to examine the books. Alternatively, they may require you to bring the relevant
documents to IRAS for review instead of visiting your premises. Tax auditors would usually
examine the accounting and tax records including the source documents to determine if the
tax declaration is accurate. Any mistakes will be rectified and additional tax and/or penalty
will be imposed.
What to Do During a Tax Audit

When you receive a notification from IRAS regarding a tax audit, you usually have some
time to prepare for it. You should consider engaging a tax agent to quickly review your
accounts and tax filing to uncover any glaring or common mistakes/errors. When the tax
auditors meet up with you, let them know that you are in the process of disclosing the errors
you have just discovered. By creating an impression that you or your company conducts
periodic review of tax filing for voluntary disclosure, IRAS tax auditors may reduce their
scope/extent of audit as the risk of incorrect tax filing is perceived to be low. In other words,
the auditors may check less and conclude the tax audit/checks earlier.
Why Engage A Tax Advisor Pte Ltd?

A Tax Adviser Pte Ltd has the expertise and resources to assist you in IRAS tax audit so that
you can continue to focus on your business without being distracted by the tax audit. For a
totally stress free tax audit, why don’t you consider our ‘tax health checks’ (i.e. a self-
imposed/voluntary tax audit initiated by yourself) to immediately rectify any tax filing issues
via voluntary disclosure exercise?
The difference between Auditing and

Investigation
is that auditing is examining and reporting on books of accounts of a company while the
investigation is a process of knowing a particular fact, truth or incident. Auditing requires
general inspection whereas investigation requires focus and in-depth examination. Auditing is
conducted annually but the investigation is conducted according to the requirement of the
client.
An Auditor is a person authorized to verify or review the accuracy of financial records while
an investigator carries out an investigation or a formal inquiry.
Comparison Table Between Auditing and Investigation

Parameter of
Auditing Investigation
Comparison
Is an examination or inspection of records,
An extensive investigation
Definition processes and activities to ensure compliance
to prove a particular fact.
and integrity.
Depth General examination. Critical and extensive.
To build and maintain trust within an entity or
This is only conducted
group, prevents fraudulent activities and
Purpose when there is a potential
ensuring high standards and processes is
dishonesty on a certain fact.
always upheld.
Nature of
General Confidential
Report
Mandatory Yes No
Performing
Internal or External Auditor/Accountant Experts
entities

Tax Audit Processes

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The Audit Plan should contain any or all of the following issues depending on

the type of audit to be performed:

1. Taxpayer’s background information

11. Audit Files

1. Synopsis of audit instructions.

2. Basic or background information about the taxpayer.

3. Analytical review of the taxpayer’s returns.

4. Audit plans, including the Audit Planning Memorandum.

5. Scope and extent of audit coverage, including the audit programme.

6. Minutes of meetings with all parties concerned.

8. Financial statements, tax returns and related computations.

9. Audit working papers, forms and templates which summarise details of

10. Copies of supporting documents and correspondences.

12. Final Audit Report.

13. Recommendations with regards to the tax administrative processes which

14. Recommendations with regards to amendments to tax legislation, which

15. Case closure reports and documents

Tax Audit vs Tax Investigation

Tax Audit Process

What to Do During a Tax Audit

Why Engage A Tax Advisor Pte Ltd?

The difference between Auditing and

Comparison Table Between Auditing and Investigation

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